Finance Minister Mthuli Ncube on Thursday presented his budget for 2022.
Here are our major highlights from the 2022 national budget presented today.
- ZWL$927.3 billion budget was proposed. Revenue of Z$850.8bn is expected. The deficit will be funded mostly from domestic borrowings
- Health, agriculture and infrastructure are getting the bulk of IMF funds
- Top three votes go to Agriculture (ZW$124bn), Primary and Secondary Education (ZW$124bn), Health (ZW$118bn)
- Ncube still expects economic growth of 7.8%, but admits that “renewed pressures on inflation and a misaligned official exchange rate and rising international oil prices” may derail projections.
- There will be a capital budget of ZWL$334.2 billion. Out of this, ZWL$156.4 billion is for infrastructure
- Annual inflation is projected to end the year between 52% and 58%, up from the revised target of between 25% and 35%.
- Tax-free thresholds are up from ZWL$10 000 to ZWL$25 000. Tax bands will end at Z$500 000, above which a tax rate of 40% will apply, starting 1 January 2022. The tax-free bonus threshold is up from Z$25 000 to Z$100 000.
- For USD salaries, the tax-free threshold is up from US$70 to US$100. The tax-free bonus has been increased from US$320 to US$700, with effect from November.
- Excise duty on cigarettes is up from from 20% and US$5.00/1000 cigarettes to 25% plus US$5.00/1000
- Withholding tax is up from 10% to 30% from January
- Capital equipment worth at least US$10,000 can be imported duty-free
- Fuel imports (Jan-Sept) stood at US$285.1m, down from US$488.6m over the same period in 2020
- Raw material and machinery imports rose 94% and 50% in 2021, respectively, at US$2.4bn and US$1.3bn
- Exports were up 19% at US$4.053bn versus US$3.4bn in the months up to September 2021
- Government will issue USD-denominated Government Bonds of up to US$100 million on the Vic Falls Stock Exchange. The money will be used for infrastructure. The Infrastructure Development Bank of Zimbabwe (IDBZ) and Afreximbank are the Joint Lead Arrangers/Financial Advisors.
- Between January and September 2021, Treasury paid US$44.2 million to external creditors. These were payments to active portfolios and token payments to international financial institutions and bilateral Paris Club creditors.