95 pc of 2024 budget to come from taxes 

Zimbabwe is targeting to collect nearly $31 trillion next year, with 95 percent expected to come from taxes, according to the 2024 Budget Strategy Paper presented by Finance and Economic Development Minister  Mthuli Ncube last week.

The projected revenue for the year is against expenditures of $33,1 trillion, resulting in a budget deficit of $2,3 trillion or 1,5 percent to the Gross Domestic product.

“Employment costs will be maintained at levels of below 50 percent of revenue, while capital expenditures will gradually increase to 5,7 percent of GDP in order to address the existing infrastructure gap,” said Mhuli.

“Furthermore, social spending will be scaled up in order to address inequality and ensure no one and no place is left behind.”

Economic growth is expected to remain positive, and is projected at 5,3 percent, 5,2 percent, and 5 percent for 2023, 2024, and 2025 respectively—figures within the National Development Strategy (NDS1) growth targets.

Government measures in support of macroeconomic stability, coupled with the drive towards structural economic transformation, value addition and beneficiation, are expected to sustain this positive growth trajectory, Mthuli said.

However, revenue collection risks may emanate from reduced tax compliance and transfer pricing, particularly in mining, said the Minister. “This risk is further compounded by rising dollarisation, which is shrinking the tax base and promoting informalisation.”

Full dollarisation, according to the minister has the potential to reduce the taxable base by almost 25 percent. To mitigate the impact, the Government is implementing measures to boost the use of the Zimbabwean Dollar in domestic transactions.