2 Percent Tax Is Necessary To Fund Govt Subsidies On Bread, Fuel, Cooking Oil - Finance Perm Sec

Permanent Secretary in the Ministry of Finance and Economic Development George Guvamatanga has said that Finance Minister Mthuli Ncube introduced a 2 per cent tax on all money transfers because the government needs everyone to contribute towards subsidies. Guvamatanga claimed that citizens of Zimbabwe enjoy cheap bread, fuel, cooking oil and maize meal among other commodities because of the government’s subsidies. Appearing before the Parliamentary Portfolio Committee on Budget and Finance yesterday, Guvamatanga said,

Each and every citizen of this country enjoy when compared to other countries or any other region they enjoy cheap bread which is subsidised by government, he or she enjoys cheap maize meal which is subsidised by government, they enjoy cheap fuel which is subsidised by government, they enjoy cheap electricity also subsidised by the government and even enjoy cheap cooking oil also subsidised by government but the government needs to fund those subsidies…We can quantify the level of these subsidies, they run into billions and they are also the reason for the budget deficit but not all of it, we can actually demonstrate that as a government that some of the budget deficit has been incurred so that we can support these social nets to protect the citizens of Zimbabwe but then we can’t only have 4 percent contributing to taxes and the other 96 percent just benefitting.

The 2 percent has not been well received and the Law Society of Zimbabwe (LSZ) and legal watchdog Veritas have said that the tax is illegal.

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