'Expect Huge Tax Increases, Some In US Dollars', Biti Speaks Mid-term Budget Review

Former Finance Minister Tendai Biti said nothing progressive can be expected from the mid-term budget review set to be presented this Thursday by Treasury boss Mthuli Ncube.

Biti believes the government will blame its alleged ineptitude on the coronavirus crisis instead of adopting policies that will rescue the economy from the current imbroglio. Biti posted on Twitter:

[Today] the regime presents a knee jerk involuntary Mid-term Review in the backdrop of a complete meltdown. It’s Armageddon out there. Total loss of confidence, zero productivity, hyperinflation [and foreign currency] FX chaos. The Stock Exchange has been shut, workers are in turmoil and markets are jittery.

Predictably regime will lump blame on COVID-19 to justify a huge supplementary budget and a series of tax increases many of which will be in US$.

The macroeconomic framework will be revised to recognize contraction but the regime will not accept responsibility for its incompetence and missteps.

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Any review that doesn’t attend to real reform will be a damp squib. The regime must: 1) dollarise 2) Remove export surrender rules 3) Pay US$ wages 4) Scrap the 2% IMT tax 5) Open Stock Exchange6)offer incentives to industry 7) offer secure land title 8) deal with corruption 9) balance books.

Earlier this week, the Zimbabwe National Statistics Agency (Zimstat) indicated that the country’s annual inflation rate for June slowed down from 785.55% in May to 737.26% while month-on-month, the inflation rate in June was 31.66%, up 16.53 percentage points on May‘s rate of 15.23%.

However, the Consumer Price Index (CPI) for the month ending June 2020 stood at 1,445.21, up from 1,097.65 in May 2020.