Budget 2021: The highlights

Finance Minister Mthuli Ncube will approach Parliament seeking condonation for unauthorised expenditure going back four years.

Finance Minister Mthuli Ncube announced a ZWL$421.6 billion national budget for 2021 on Thursday. Here are the highlights:

  • The economy is expected to grow by 7.4% after a 4.1% contraction in 2020
  • Year-on-year inflation forecast to close 2021 at 9%
  • The economy is projected to add 151,000 formal jobs in 2021  
  • Govt revenues projected at ZWL$390.8 billion (2020: ZWL$173bn)
  • Govt plans to spend ZWL$421.6bn in 2021, against ZWL$178.5bn this year
  • ZWL$131.6bn earmarked for capital projects, 31% of budget and 5% of GDP
  • Govt wage bill to rise by 144% in 2021
  • The two education ministries get the biggest allocation, ZWL$69.5bn. This is followed by Health, with ZWL$54.7bn. This is 13% of the budget, higher than last year’s 10%, but still short of the Abuja Declaration’s 15% recommended threshold
  • Tax-free threshold up to ZWL$10,000 from ZWL$5,000
  • Up to ZWL$25,000 of bonus to be tax-free (2020: ZWL$5,000)
  • Transactions up to ZWL$500 (US$5 forex sales) exempt from 2% tax
  • Fuel import duty now US$0.30 for both petrol and diesel
  • Fuel imports by road to attract US$0.05 levy per litre
  • An option now available to pay Zinara toll fees in US dollars or local currency, starting from US$2 for light vehicles
  • Sharp rise in sin taxes; tobacco (around 300%), spirits (around 700%), beer (around 600%)
  • Govt to restrict importation of vehicles older than 10 years for non-commercial use. One will now need an import permit for older cars
  • 1317 civil servants imported cars worth US$5.1m (US$3,872/car) since March 2019
  • New SME unit to be set up at ZIMRA to target tax collection from SMEs
  • Landlords of commercial complexes housing small traders to collect equivalent of US$30 presumptive tax from tenants every month
  • ZWL$1.1 billion budgeted to upgrade and build tollgates to end congestion
  • ZWL$31.6 billion set aside for roads in 2021
  • Cars for use by Line Ministries and Government Departments to be purchased from local assembly plants
  • Gwayi Shangani dam, now at 40% completion, has the biggest dam construction budget at ZWL$4.5 billion. It’s meant to supply water to Bulawayo. The African Development Bank will disburse ZWL$491 million to upgrade the city’s water supply and sanitation infrastructure
  • Self-employed professionals without tax clearance will pay a presumptive tax of up to ZWL$1 million a month
  • ZWL$19.5 billion allocated as devolution funds