Saturday, October 23, 2010

(HERALD) Reduce income tax levels, Biti told

Reduce income tax levels, Biti told
Herald Reporter

FINANCE Minister Tendai Biti should reduce income tax levels and ensure the country derives its revenue from natural resources such as minerals, a Parliamentary Portfolio Committee on Budget and Finance heard yesterday.

The committee, chaired by Goromonzi North House of Assembly Member Cde Paddy Zhanda (Zanu-PF), was told that the current tax levels were so high that any salary adjustments did not leave ordinary workers with reasonable disposable income.

The majority of participants at a budget consultative meeting in Harare yesterday were agreed that the Finance Minister should cut tax levels.

Different speakers, including representatives from the Zimbabwe Congress of Trade Unions, urged Treasury to direct more resources to the social sector and leave more disposable income by raising tax-free thresholds.

“Zimbabwe’s taxation levels are too high. Government should reduce taxation levels by at least 15 percent,” said Mr Ronald Mlambo, a Harare resident.

Government should get more of its revenue from natural resources such as diamonds and gold, among others. It is futile to raise people’s salaries when tax levels are too high.”

A ZCTU representative echoed the same sentiments, saying Zimbabwe’s tax regime was too high and ought to be adjusted.

He said the reduction would leave workers with more disposable income.

Another Harare resident, Mr Hopewell Gum-bo, said the budget should address social services to enable ordinary people to access essential services such as education and health.

He said the liberalisation of the economy had the effect of widening the gap between the rich and the poor.

“Liberalising the economy has seen private schools charging fees well beyond the reach of many. Government should channel more resources to the social service sector to enable ordinary people to access them,” he said.

The Government, he said, should not prioritise payment of debts because that would compromise service delivery.

“Everyone in the world knows that we are facing problems. Let’s utilise our natural resources. It is not good that we just wake up to hear that Zimbabwe has paid so much to the International Monetary Fund without proper consultation,” he said.

Mr Gumbo said Zimbabwe should set aside money in the form of a percentage of revenue that it intends to channel to debts.

In his 2010 Mid-Term Fiscal Policy Review Statement, Finance Minister Tendai Biti announced a minimal increase of US$175 tax-free threshold.

The portfolio committee has been on a whirlwind mission to gather views from cities around the country. It is expected to submit a report in Parliament next week when the House of Assembly resumes sitting.

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