Expectations high as Mthuli presents 2024 budget

24 Nov, 2023 - 00:11 0 Views
Expectations high as Mthuli presents 2024 budget Finance, Economic Development and Investment Promotion Minister Mthuli Ncube

eBusiness Weekly

Tapiwanashe Mangwiro

Zimbabweans are eagerly awaiting the 2024 National Budget Statement set to be presented by Finance, Economic Development and Investment Promotion Minister Mthuli Ncube next Thursday.

Mthuli confirmed the date while responding to questions on the sidelines of an event he presided on in Bulawayo recently.

Areas of keen interest include how he plans to deal with the effect of El Niño, inflationary pressures as well as exchange rate instability.

Also key will be areas such as service delivery, health, education, taxes and salary adjustments.

Recent recommendations by the central bank for Treasury to remove the Intermediated Money Transfer Tax as well as the removal of the 10 percent trading margin above the interbank rate will also be watched by economic agencies with keen interest.

Analysts and economists say the budget plays a crucial role in shaping the economic landscape and the overall well-being of the population.

Economist Enoch Rukarwa believes a desirable overall tone of the 2024 National Budget should be premised on consolidating and sustaining the relative stability that we have experienced in the last 12 to 24 months.

Rukarwa, however, said an effective contractionary stance should also not stifle aggregate investment and economic growth.

Economic commentator Glady Mutsopotsi-Shumbambiri believes the budget should talk about how service delivery in the health and education sector should be improved. Supply of adequate drugs in public hospitals and revamp of infrastructure and good remuneration of teachers to improve service delivery

Tax policies play a pivotal role in the economic landscape and Zimbabweans can expect a careful review of tax structures to ensure fairness and encourage economic growth.

“The Government may introduce measures to broaden the tax base while providing relief for certain income groups. Striking a balance between generating revenue and alleviating the burden on citizens will be a key consideration,” said economist Tinevimbo Shava.

“The Zimbabwean tax framework remains growth limiting in terms of its overall haircut to business operations profitability. Any form of tax easing on the current tax structure should be welcoming to the greater business community,” Rukarwa added.

Mutsopotsi-Shumbambiri believes Treasury should seek ways to broaden its tax base, simplify and improve tax system and administration.

“The Government should consider expanding the tax base by introducing new taxes or increasing existing taxes on non-traditional taxable goods and services. This could include taxes on digital services, luxury goods, or environmental taxes.

“The current tax system in Zimbabwe is complex and burdensome for businesses. The Government should simplify the tax code, reduce the number of tax rates, and eliminate unnecessary exemptions and deductions.

“The Government should strengthen tax administration by investing in technology, training tax officials, and fighting corruption. This would improve tax compliance and increase revenue collection,” she said.
Economist Dr Prosper Chitambara says tax is one of the major challenges in terms of the competitiveness gap as an economy and we need lesser taxes and simplified taxes across the board.

“There is a need for some tax relief given the tax burden imposed by the plethora of taxes and levies, even duties and my expectation is that maybe we need to simplify and consolidate our taxes so as to enhance competitiveness,” he elaborated.

Analyst Tafara Mtutu says taxes are a delicate issue because if they raise taxes, they will make the few formal businesses run away and hide into the informal market.

“What is ideal is to create an enabling environment of incentives in order to lure businesses in the dark to begin paying taxes after they formalise, but unfortunately, I do not feel they will look in that direction,” Mtutu alluded.

“In order to push the use of the local currency they might increase the taxes in USD transactions, it becomes a hindrance to formal businesses operations and it might cause a bank run as people will prefer transacting in cash,” he added.

Addressing the concerns of civil servants regarding salary adjustments is likely to be a priority in the 2024 budget.

Treasury may seek to align public sector salaries with the rising cost of living to improve the standard of living for its workforce. Negotiations with labour unions and a sustainable approach to salary adjustments will be crucial in fostering a motivated and efficient public service.

Service delivery has been a perennial concern for Zimbabweans, encompassing issues such as infrastructure development, public utilities, and efficient public service. The 2024 budget is anticipated to address these concerns by allocating funds to critical projects that enhance the quality of services citizens receive.

On service delivery Rukarwa added that, “Service delivery remains a critical area in dire need of funding especially along access to clean water and sanitation services. As the country seeks to achieve sustainable development goals, adequate funding in these expenditure buckets need to be effectively pursued.”

Chitambara believes a lot needs to be done in terms of increasing investments towards social services especially in the health, education and sanitation areas.

He also added that, “The digital economy is important and we need to incentivise the private sector because Government cannot do justice in such areas but we need to be innovative in our fundraising and resource mobilisation in order to drive the economy forward.”

Zimbabweans are anticipating increased budgetary allocations to the health sector to strengthen the country’s response to public health challenges.

“Investments in medical infrastructure, the procurement of essential medical supplies, and the recruitment and training of healthcare professionals are expected to be prioritized,” said Tinashe Mukunyadze, a citizen.

Mutsopotsi Shumbambiri emphasized that Government should prioritize infrastructure development, particularly in areas such as roads, energy, and telecommunications. This would improve connectivity, reduce transportation costs, and boost economic activity.

“The Government should strengthen healthcare and social services to improve the well-being of the population. This includes expanding access to affordable healthcare, providing support for vulnerable communities, and investing in disease prevention and control,” Mutsopotsi-Shumbambiri said.

Education forms the backbone of any nation’s development and the 2024 budget is likely to allocate resources to improve educational infrastructure, enhance teacher training programs, and provide access to quality education for all.

Educationist Spindiwe Chifamba said, “The budget must include initiatives to bridge the digital divide and ensure that students across the country have equal opportunities to excel academically if we are to truly move with the leaving no place and no one behind. This will also help in driving the economy forward in the long term.”

According to Mutsopotsi-Shumbambiri investing in education and skills development is crucial for creating a skilled workforce that can meet the demands of the modern economy. The Government should increase funding for education, improve teacher training, and promote vocational training programs.

The forthcoming 2024 national budget holds great significance for Zimbabweans, as it sets the tone for the country’s economic trajectory and the well-being of its citizens. As expectations run high, the Government’s commitment to addressing issues in service delivery, healthcare, education, taxes, and salary adjustments will be closely scrutinized.

Ultimately, the success of the budget will be measured by its impact on improving the lives of the people and fostering sustainable economic development.

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