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
