The Finance Minister Mthuli Ncube presented the 2021 National Budget yesterday and here are some of the major highlights from the budget themed Building Resilience and Sustainable Economic Recovery:
- The economy is expected to rebound by 7.4% in 2021 from a consecutive 2-year downturn
- 150 000 formal jobs lost due to the COVID-19 pandemic are expected to be recovered
- Year on year inflation is projected to reach 9% by the end of 2021
- PAYE tax-free threshold reviewed from ZW$5000 to ZW$10 000
- IMTT (2% Tax) tax-free threshold from ZW$300 to ZW$500
- Youth Employment Tax Credit reviewed from ZW$500 to ZW$1500
- Bonus Tax-Free Threshold revied from ZWL$5 000 to ZWL$25 000 effective 1 November 2020.
- Excise Duty on Tobacco and Alcoholic Beverages reviewed upwards
- Cannabis Levy, chargeable on the value of exports, at varied rates ranging from 10 to 20% in line with the level of processing introduced.
- Govt Introduces a simplified tax regime for self-employed professionals.
- Suspension of Powdered Milk & Ring-fenced quantities of raw Cheese for the Dairy Industry extended.
- Duty suspended on motor vehicles imported by Safari Operators and buses for Tour Operators
- Suspension of Duty on Cross-Border Luxury Coaches extended
- Rebate of Duty on raw materials imported under the Shoe Manufacturers Rebate
- Rebate of Duty on Fertiliser Manufacturers
The government further made promised to do the following:
- Strict observance of the Budget and Public Finance Management Act rules
- Borrowing only for the budgeted expenditures and through market-based operations
- No more recourse to Central Bank overdraft and other windows
- Gradual reduction of the wage bill
- Continuous review and rationalisation of public service posts;
- Rolling out of PFMS controls to all departments and local levels;
- Adherence to new Procurement Act rules
- Limit subsidies to those that are targeted and accommodated in the Budget;
- Complete migration of the Public Service Pension scheme from Pay-As-You-Go- pension to
funded Pension Scheme
- Continue strengthening taxation systems.