Impoverished Zim squeezes poor

The Zimbabwean government is shaking down its own citizens for cash because there are no foreign donors or investors willing to cough up – and it is poor people who are feeling the brunt.

With no external budgetary support and the country increasingly importing more than it exports, citizens have become the government’s target as a source of income.

Finance Minister Patrick Chinamasa said his biggest challenge was to “raise additional revenue to finance nondiscretionary expenditure”, and has increased excise duty on diesel and petrol.

At his mid-term fiscal policy review last week he announced a range of new taxes and levies on goods such as beverages, blankets, imported soap and furniture.

Tenants living in low-cost government houses must now pay higher rent in order “to raise adequate funds to refurbish and … maintain the housing units”.


Not even charities have been spared. Donated goods, said Chinamasa, ended up being sold, and so rebates on duty on imported foodstuffs for welfare groups were removed.

Taxes account for 94% of all government revenue, according to labour economist Godfrey Kanyenze, and he said the state will continue to seek new ways to squeeze money out of people as long as it remains un-able to get foreign financial support.

The biggest shock was Chinamasa’s 5% tax on cellphone airtime and a 25% duty on cellphones.

Virtual collapse
And he doubled duty on imported passenger cars and said this was to protect local car assemblers. In reality, though, there is little left of the car industry. Zimbabwe is spending more than $1-billion a year on used car imports from Asia, which has led to the virtual collapse of the local car assembly industry.

Former finance minister Tendai Biti said the new tax measures would have the opposite effect of what the government intended.

“It is fiscal fascism and … shows we should expect to see further standstill and deepening of recession, general increase in inflation and a further reduction in revenue because companies will close,” Biti said.

In August, the government authorised new taxes on street vendors. The Zimbabwe Revenue Authority (Zimra) expects to earn $45nbsp;000 a day by charging them a dollar a day to trade. After years of economic turmoil that has destroyed industry, informal trade is now Zimbabwe’s biggest employer, and the new measures have attracted anger.

“Most vendors are living from hand to mouth and struggling to remain in business,” the National Vendors Union Zimbabwe said.

Reserve Bank of Zimbabwe governor John Mangudya said: “I know taxation is never anything that people want but it’s necessary to ensure that the government can balance [its] books.”

Revenue was $112-million less than projected, the result of lower income from corporate and income tax as more companies shut down or simply defaulted.

Zimra has now turned to the courts for garnishee orders and is raiding the bank accounts of companies that fail to pay their taxes on time. Government departments have not been spared, with garnishee orders being issued this year against the Civil Aviation Authority and municipalities.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Jason Moyo
Guest Author

Related stories

SAA in talks to recoup R350-million in blocked funds from Zimbabwe

The cash-strapped national carrier is in the process of recouping its blocked funds from Zimbabwe, which could go towards financing the airline’s business rescue plan

Citizens tired of being played for a fool

The use of a South African Air Force jet by ANC officials without the minister following the required procedures is one such case — and more questions arise on examination of that case

Trump win will abort health care

Threats of funding cuts has caused a reduction in reproductive and sexual health services

Civilians need to oversee South Africa’s defence force

ANC officials’ ‘taxi’ ride in an SANDF jet to Zimbabwe is further evidence that more transparency is needed in the military

Inside Zim’s illicit gold mine trade

Desperate people mine the mineral, but it is ‘untouchable big people’, including top state officials, who reap the real benefits

Editorial: Just another insult from the ANC

The ANC’s response to its senior officials’ lockdown trip to Zimbabwe leaves much to be desired
Advertising

Subscribers only

Toxic power struggle hits public works

With infighting and allegations of corruption and poor planning, the department’s top management looks like a scene from ‘Survivor’

Free State branches gun for Ace

Parts of the provincial ANC will target their former premier, Magashule, and the Free State PEC in a rolling mass action campaign

More top stories

Why anti-corruption campaigns are bad for democracy

Such campaigns can draw attention to the widespread presence of the very behaviour they are trying to stamp out — and subconsciously encourage people to view it as appropriate

Tax, wage bill, debt, pandemic: Mboweni’s tightrope budget policy statement

The finance minister has to close the jaws of the hippo and he’s likely to do this by tightening the country’s belt, again.

SA justice delays extradition of paedophile to UK

Efforts to bring Lee Nigel Tucker to justice have spanned 16 years and his alleged victims have waited for 30 years

Former state security minister Bongo back in court

Bongo and his co-accused will appear in the Nelspruit magistrate’s court in Mpumalanga over charges of fraud, corruption and theft
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday