18 March 2014

Zimbabwe: Govt Imposes U.S. $6,000 Parastatal Salary Cap

Photo: New Zimbabwe
Top earners in the country's parastatals and local authorities.

PRESIDENT Robert Mugabe's government on Tuesday declared a $6,000 cap for top earners in the State-owned enterprises and local authorities. The development follows media revelations of mega salaries earned by executives in parastatals most of which were practically insolvent with ordinary workers going for months without pay.

The entities have since been ordered to submit their salary schedules to the Office of the President and Cabinet as government moves to put a top to the rot. Finance and Economic Development Minister Patrick Chinamasa, who was accompanied by Information Minister Jonathan Moyo confirmed the salary cap to reporters at a press conference in Harare.

Chinamasa said the government was yet to verify the authenticity of the salary schedules submitted by the entities as an audit was still being carried out.

"Government has been seized with the task of uprooting rampant corrupt practices, excessively high and unjustified salaries and allowances that most state enterprises, parastatals and local authorities have been, either illegally, procedurally, unreasonably or immorally awarding to chief executive officers," said Chinamasa.

"With immediate effect Cabinet has decided, as an interim measure, that no chief executive officer of any State enterprise, parastatal or local authority should receive a total pay package (basic salary plus benefits) which is above $6,000 per month for those in job level one," the treasury chief said.

Asked if the move was not illegal and how he would deal with possible court action by affected parties Chinamasa said he would not lose sleep over such issues.

"As a lawyer that is the least of my worries because I would be interested to know on what moral or legal standpoint anyone would challenge this decision," he said.

"Like I said this is temporary while we deal with the audits on a case by case basis. We will after the audits see whether we need to review this decision upwards or better still downwards."

Mugabe demanded action against CEOs enriching themselves in State enterprises following reports that the likes of Zimbabwe Broadcasting Corporation (ZBC) boss Happison Muchechetere, now suspended, was earning $44,000 per month.

Elsewhere, Premier Medical Aid Society's Cuthbert Dube's $535,000 left Zimbabweans stunned with government officials admitted the practice was widespread in nearly all State enterprises.

Meanwhile, Information Minister Jonathan Moyo: "The veracity of these figures will be authenticated by the audit that will be undertaken at the direction of the office of the Auditor and Comptroller General's office. We cannot vouch for them.

"As to when the audit will be completed we cannot tell because it is a mammoth job that we have before us and the committee will need to mobilise resources for this. We are looking at something that has happened over five years."

The looting was also rampant in local authorities with Chinamasa saying bosses at the country's municipalities were "delivering to their pockets".

"Take for example I never knew Plumtree had capacity to pay this much," he said.

"While its top earner took home a basic salary of a paltry $1173 you should look at the benefits figure that stands at a shocking $15 854. Look at Gwanda as well whose top pay earner stands at $20588," Chinamasa said.

The Finance Minister said the decision to more bump benefits and not the basic salary was meant to evade taxation warning there was a likelihood of people being charged for tax evasion although he was noncommittal when pressed over the issue.

"I cannot say with finality whether there is prejudice to that effect where we can charge people with tax evasion but it is highly likely," he said.

"Why did people behave the way they did, why is it that they preferred these non-taxable incomes rather than the normal way? We will investigate that as well," he said.

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