President Mnangagwa has signed into law two Acts operationalising the ZiG276,4 billion 2025 National Budget presented by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube on November 28 last year.
The Appropriation Act, which authorises the bulk of Government spending for this year, the rest being set as permanent spending in other Acts, and Finance Act, which enacted the changes in taxation announced in the Budget, were published in an Extraordinary Government Gazette on Monday after President Mnangagwa assented to them.
This means the Government can now spend the money allocated by Parliament and collect taxes at the changed rates and any new taxes imposed with new taxpayers, such as the swathe of the informal sector, now legally obliged to pay taxes that others were already paying.
The Budget comprises ZiG234 688 015 000 in expected revenues charged to the Consolidated Revenue Fund and ZiG6 248 797 000 in retention funds that are meant for specific purposes as provided for by the Public Finance Management Act.
Parliament passed the Budget last month after lengthy debates that lasted five days with legislators across the political divide interested to know how it builds resilience for different groups of people and grows the economy.
In response, Prof Ncube said support for agriculture, for example, through investment in dam construction which in turn supports irrigation, was one way the budget would building resilience for farmers against climate shocks and food insecurity.
"There was also a lot of interest in terms of how the Budget is building resilience for women and female entrepreneurs. In that respect, the Budget will support the capitalisation of the Empowerbank as well as Women's Bank," he said.
Prof Ncube said provision of sanitary wear to young girls, generally through the public schools system, was a topic for debate and ZiG211 million was set aside for that.
The Budget builds resilience against currency and other shocks by maintaining fiscal discipline where the deficit will be kept within 0,4 percent of Gross Domestic Product, or at least below 1 percent of GDP.
In terms of allocations, the Ministry of Primary and Secondary Education got the highest vote of ZiG46,7 billion while the Ministry of Health and Child Care was allocated ZiG28,8 billion.
Lands, Agriculture, Fisheries, Water and Rural Development was allocated ZiG22,9 billion while the Finance, Economic Development and Investment Promotion Ministry got ZiG28,7 billion. The Ministry of Defence was allocated ZiG18,05 billion.
The Ministry of Public Service, Labour and Social Welfare was allocated ZiG10,7 billion while that of Transport and Infrastructure Development got ZiG5,4 billion. Parliament got ZiG2,7 billion.
The Finance Act, while maintaining tax bands in US dollars, converted these to ZiG at current exchange rates so incomes from 0 up to ZiG33 600 a year will not be taxed, from ZiG33 601 to ZiG100 800 will be taxed at 20 percent, from ZiG100 801 to ZiG336 000 at 25 percent, between ZiG336 000 and ZiG672 000 at 30 percent, between ZiG672 001 and ZiG1 008 000 at 35 percent and anything above ZiG1 008 001 a year at 40 percent tax.
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Those into sport betting will now pay a 10 percent tax of their winnings deducted when they are paid out and sent to Zimra by the betting house, while the betting houses will pay three percent of their gross monthly income.
A half percent surcharge is now being charged on the sale value of less healthy fast foods that include burgers, pizza, chips, chicken and doughnuts among others that will be announced in regulations to be published later.
A 20 percent surcharge will now apply on the sale value of non-renewable plastic carrier bags whether manufactured locally or imported.
