HARARE- Zimbabwe’s Finance Minister, Professor Mthuli Ncube has been rigorously criticised for exempting Chinese telecommunications giants, Huawei from paying income tax.
Under Statutory Instrument 25 of 2020, Ncube recently exempted Huawei from paying the tax. Legislators view the exemption as a violation of the principles of Public Finance Management. MDC Member of Parliament for Mabvuku-Tafara James Chidhakwa said:
Can the minister share with this House why he introduced a Statutory Instrument exempting Huawei Technology from paying income tax? Is it not that such a move is contrary to the principles of good public finance management as codified in Section 298 of the Constitution which clearly states that the burden of taxation must be shared fairly?
In resonance with this, former Finance Minister who is also MDC vice president Tendai Biti observed that although the Income Tax Act allows Ncube to give tax exemptions, exempting Huawei was problematic because the Constitution does not give him the power to give a tax exemption that “applies retrospectively.”
Taxes constitute a huge source of revenue for many states around the globe including Zimbabwe and Public Finance experts advise that tax holidays be issued when they aim at achieving a positive target including encouraging tax compliance or promoting a new policy.
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