The southern African nation, reeling from shortages of foreign exchange, is targeting total revenue of $5.7 billion in the current fiscal year and $6.4 billion in 2019, Finance Ministry Permanent Secretary George Guvamatanga said in a presentation in Harare, the capital, on Monday. The government is scheduled to present its 2019 budget next month.
Finance Minister Mthuli Ncube introduced a 2 percent tax on money transfers this month to broaden the country’s tax base, part of a series measures he’s implementing to stabilize the economy. The levy of 2 cents per dollar transacted replaced a previous tax of 5 cents per transaction.
“Although this is a bitter pill to swallow, we have to accept the principle that it was necessary for everyone including our large informal sector to contribute to the fiscus,” Guvamatanga said.
The country hasn’t had its own currency since it scrapped the Zimbabwean dollar in 2009 to end hyperinflation. It accepts the likes of the U.S. dollar, euro and rand as legal tender, as well as a quasi-currency called bond notes.
The value of bond notes, introduced two years ago and which were meant to be worth the same as greenbacks, has plummeted since the new tax was announced, with locals rushing to buy goods while they still hold value. The majority of transactions in the country are electronic, which are worth even less than payments via bond notes. Shops charge different prices depending on whether customers use real dollars, bond notes or pay electronically.
The new tax will increase costs for companies, which they will pass on to consumers, according to John Robertson, an independent economist in Harare. Many companies may be forced to reduce their operations or close altogether as people’s spending power is hit, he said. DM
Want to watch Richard Poplak’s audition for SA’s Got Talent?
Who doesn’t? Alas, it was removed by the host site for prolific swearing*... Now that we’ve got your attention, we thought we’d take the opportunity to talk to you about the small matter of book burning and freedom of speech.
Since its release, Pieter-Louis Myburgh’s book Gangster State, has sparked numerous fascist-like behavior from certain members of the public (and the State). There have been planned book burnings, disrupted launches and Ace Magashule has openly called him a liar. And just to say thanks, a R10m defamation suit has been lodged against the author.
Pieter-Louis Myburgh is our latest Scorpio Investigative journalist recruit and we’re not going to let him and his crucial book be silenced. When the Cape Town launch was postponed, Maverick Insider stepped in and relocated it to a secure location so that Pieter-Louis’ revelations could be heard by the public. If we’ve learnt one thing over the past ten years it is this: when anyone tries to infringe on our constitutional rights, we have to fight back. Every day, our journalists are uncovering more details and evidence of State Capture and its various reincarnations. The rot is deep and the threats, like this recent one to freedom of speech, are real. You can support the cause by becoming an Insider and help free the speech that can make a difference.
*No video of Richard Poplak auditioning for SA’s Got Talent actually exists. Unless it does and we don’t know about it please send it through.
Dwayne "The Rock" Johnson is an ordained minister.