adminProsper Ndlovu, Business Editor
GOVERNMENT has extended a string of fiscal incentives to consolidate growth of the productive sectors and provided relief to tax payers in view of prevailing economic hardships.
In his 2019 National Budget Statement, the Minister of Finance and Economic Development, Professor Mthuli Ncube, announced a renewal of rebate facilities for companies, subject to set conditions and expansion of some to key productive sectors. The minister noted the burden on ordinary tax payers and the need to attract and retain skilled human capital. He said Government was keen to cushion low income taxpayers against rising prices of basic goods.
“I propose to review the tax-free threshold from the current US$300 to US$350 and further widen the tax bands from US$351 to US$20 000, above which income is taxed at the highest marginal tax rate of 45 percent, down from 50 percent,” said Prof Ncube.
He also said the two cents electronic tax would be further reviewed to factor in stakeholder concerns on the need to reduce the cost of doing business.
Prof Ncube said the clothing manufacturers’ rebate for large scale firms would now cover additional fabrics that are not locally produced with effect from 1 January 2019.
In line with the Transitional Stabilisation Programme thrust of supporting sustainable micro, small and medium enterprises growth and development, he proposed to avail a ring-fenced manufacturer’s rebate facility to micro-small to medium enterprises, subject to meeting prescribed conditions, with effect from 1 January 2019.
Noting continued low domestic production of raw milk requirements, Prof Ncube proposed to increase the ring-fenced milk powder requirements for 2019, with effect from 1 January 2019.
For the baking industry, he said in order to reduce the cost of production and minimise price escalation particularly on bread, which is a basic household commodity, Treasury has proposed to introduce duty free importation of raw materials under a manufacturers’ rebate with effect from 1 January 2019.
To mitigate against a potential shortage of poultry products as a result of the Avian Influenza and restore viability of the industry, Prof Ncube proposed to ring-fence duty free importation of fertilised eggs for the year 2019.
He further extended the ring-fenced suspension of duty on luxury buses for a year to ease the local transport challenges and comfort for cross border travellers.
“I propose to ring-fence importation of 100 public service buses of a sitting capacity of at least 60 passengers at a reduced customs duty rate of five percent. These measures take effect from 1 January 2019,” the Minister said.
The Treasury boss also increased excise duty-free ring fenced import quota for 12 months to supplement wine supplies.
Similarly, the fertiliser manufacturing industry will benefit from a proposed ring-fenced duty free importation of raw materials with effect from 1 January 2019, for 12 months.
Customs duty on ammonium nitrate fuel oil fertiliser would be suspended for 12 months to reduce costs of inputs. Similar rebate benefits have also been extended to furniture manufacturers, the tourism sector and the pharmaceutical sector for procurement of key raw materials and inputs. Prof Ncube, however, chided unscrupulous profiteering at the expense of patients who cannot afford drugs.
He said Government would, thus, continue to prioritise allocation of foreign currency for the purchase of raw materials in order to ensure availability of critical drugs. Prof Ncube further postponed the 15 percent tax on the exportation of unbeneficiated platinum to January 2022, noting progress and commitments made by PGM producers towards beneficiation.
He also exempted the sale of excess hides from export tax to encourage forex generation and suspended duty on goods for use by physically challenged persons. Similar exemptions were made for Value Added Tax on statutory medical regulatory authorities as well as Withholding Tax on contracts in order to provide relief to schools that have accumulated tax arrears from failure to withhold tax.
Prof Ncube further proposed to exempt the Reserve Bank of Zimbabwe from the requirement to withhold 10 percent of amounts payable in cases where the recipient of interest accruing from Treasury Bills failed to produce a tax clearance certificate during the period 1 February 2009 to 30 November 2018.
Online Reporter