Balancing budgets post the Covid-19 pandemic has been a delicate and complex matter for many countries around the globe and Zimbabwe has not been spared. Many countries have been exposed to climate change shocks, the Ukraine/Russia War and the volatile global mineral prices.
Looking at the 2023 National Budget, a number of new taxes have been proposed to augment the budget and have drawn sharp criticism from analysts on social media. The proposed wealth tax on residential properties above $100k that now attract 1% in taxes has been a hot topic.
For balance—wealth distribution not bad especially in a country with a widening gap between the rich and poor. Therefore on paper, a welcome move—the wealthy should pay their share in national development. However this will automatically increase the cost of doing business and impacting on the nation’s competitive advantage on the investment front.
Increased rentals and a determining factor on those choosing whether to invest in real estate in Zimbabwe versus other countries in the region. We could witness capital flight on the real estate sector. We hope a thorough cost benefit analysis survey has been conducted.
Increasing tollgate fees helps in revenue collection but increments of 100% and above do send wrong signals on inflation—we are fast depreciating the greenback and the economy will follow suit and increasing the cost of doing business. Perhaps staggered increases? But then this depends on the urgency of plugging the budget deficit.
Our main concern is how have we performed over the past 11 months? A simple budget versus actual performance so as to get a clearer picture for analysis and planning purposes.
Anyway it is what it is, and comply Zimbabweans have to do with local laws and regulations.
We have a few areas we think should be considered in future as alternatives for raising revenue.
Peri-urban Land: There is need to regularize state land around urban areas so that the government is involved in the sale of the land and provision of amenities. A lot of state land is being illegally sold in what has become known as Sabhuku Deals. Millions of dollars exchanging hands between Sabhukus, land barons and buyers. Nothing gets into the coffers of government in areas such as Seke, Goromonzi and Domboshava. There is need for a comprehensive survey on the value of the land sold, and still to be sold.
Melfort Smart City: We have previously covered the boundless opportunities that exist in Melfot especially when it’s converted as a smart city. Our proposal was to invite land developers who can service up to 10,000 residential stands and then sell them to decongest Harare. Most diasporans are in need of land and would have been the first to pay cash up-front. Follow the model around the country and service up to 100,000 residential and commercial stands. A good cash cow where the government simply avails land and coordinate organised development.
Of course our 2 main proposals are land based but we also add strong engagement with the diaspora who are expected to remit a total of $2.4 billion by the end of 2024. What have we done to engage and attract investment? What incentives have we crafted for them to consider home investment?
