Online Reporter
EVERYONE agrees that cutting business charges and fees speeds up development by attracting foreign direct investment and promoting economic activity.
By cutting local government and regulatory charges in the transport sector, Government is keen on enhancing the ease of doing business by eliminating the bottlenecks and red tape that stifled business operations and hindered investment.
However, before the cuts were implemented, this required careful examination of existing fees and charges.
In the transport sector, while some charges, tolls and licence fees have been left untouched, the examination found a great deal where either the existing charge could no longer be justified, or where it should be eliminated altogether.
City councils have, led by Harare, been using parking charges as general revenue with very little explanation and, in the case of Harare, with zero public accounts and zero justification.
All we get from the council is that parking was to cost US$1 an hour in Harare central business district, which was expanded to include surrounding city blocks that have little business and anyone not paying this would have their vehicle clamped and have to pay even higher penalties to move on.
Parking charges were originally introduced way back, with parking meters, as a way of rationing the most desirable parking places, to recover costs such as kerbing a street of providing parking, and to build up a capital fund that could be used to expand off-road parking in parkades.
The parking fund had to be separated from the rate fund and accounted for fully with those details readily available publicly.
Harare City Parking brought order to parking in the city centre, and saw the parkades and parking lots cleaned up.
This led to the end of touts using mafia-style tactics to demand payment. But the costs were immense and it has been reported that the city council relies on the daily transfer of parking money to pay for goods and services that are supposed to be a charge on the rates.
While we would agree that motorists and transporters should not be subsidised by rates, we fail to understand why they should be seen as a group that can be exploited in turn.
The secrecy of the parking accounts must have been partially penetrated by the recent Commission of Inquiry into Harare city finances, and no doubt what was uncovered helped make the decision to halve all the parking fees and penalties.
Parking money should be kept for parking, and perhaps for helping maintain city centre streets, but not for paying the luxury allowances of senior officials.
Cutting the cost of a pair of number plates from US$500 to US$50 was necessary, and this appears to be a case of an old charge left in place under new circumstances.
We were importing number plates until the University of Zimbabwe, under the Education 5.0 policy, set up local manufacturing premises on campus. The new plates now cost a lot less and UZ can still make a decent profit selling the plates at a much lower price.
It seems that when we do switch systems we should also do a price check and make the adjustment sooner.
The US$23 000 duty deposit payable for fuel in transit was introduced to prevent a growing menace of systematic cheating. Some of those claiming to move fuel through Zimbabwe, and so not having to pay any taxes, were in fact stopping, off-loading and then sending the tanker now filled with water to the exit border post.
The refundable duty was meant to stop this, by ensuring that the tanker either paid the full duty if it off-loaded, or allowed a proper check made at the exit point so that the duty was refunded.
But this imposed a major burden on the honest and trustworthy, many of whom diverted their tankers through Botswana or other countries, while doing little check the dishonesty of the cheats.
Cabinet this week ordered that scrapped. The honest will cheer as it does cut down their costs considerably, since they can use the shorter routes and do have to pay finance or loan charges to raise the deposit.
At the same time those fighting smuggling and cheating will need to find more effective ways to make sure the deceitful do not offload fuel where duty has not been paid. Higher criminal penalties seem desirable, along with better checking including the use of satellite data, which most respectable transport companies already use and would no doubt be willing to share.
A range of other minor costs have been eliminated, on the grounds that they were not really contributing to revenue streams beyond simply getting a business to pay the administrative cost of an unnecessary fee.
To charge US$30 to cover the cost of raising a US$30 fee does not add value to anyone, and again we need to track down more of these oddities.
Considering other charges raised at border posts, to charge lorries a fee to park at Forbes Border Post next to Mutare, without offering any extra services, seemed unnecessary and the cost cutter preparing the proposal saw the point.
In any case we need the trucks off the road and parked ready for the checks and random inspections that customs officers have to perform.
The range of cuts and abolitions of fees in the transport sector announced this week are not the final version. The work continues of going through the whole list, seeing where charges can be combined at a lower rate and seeing what charges provide so little value that they can be eliminated.
But already the Government is showing that effective and practical measures are possible without dropping standards or creating new dangers.
Similar work is being done in 11 other economic sectors as the Government converts its rhetoric in support of cleaning up the whole system into practical action.
But from what we have already seen it appears that there are grounds for major action, at least in some areas.
Simply querying every charge, figuring out why it was introduced in the first place and then resetting what it should be is making a huge difference and this practical approach must be continued so that everyone wins.
