The 2020 National Budget will focus on job creation, productivity and economic growth and plugging revenue leakages, Finance and Economic Development Minister Professor Mthuli Ncube has said.
He outlined the initiatives in his 2020 Budget Strategy Paper seen by The Herald.
“The National Budget will continue to consolidate macro-fiscal stabilisation gains made in 2019. The thrust will now shift to the following areas: growth and productivity; job creation; competitiveness and promotion of more sustainable and shared development fiscal policy thrust,” he said.
“The 2020 Budget will focus on enhancing revenue collection through advancing the ongoing Zimra and other administrative reform initiatives on broadening the tax base and closing revenue leakages.
“Therefore, prominence will be on improving taxpayer compliance through facilitative Information Communication Technology-based processes that, among other measures, simplify tax payment procedures, minimise taxpayer costs and also enhance records management.”
Minister Ncube said Government will prioritise support to local industry through appropriate tax measures.
“Revenue improving measures will, however, also be cognisant of the necessity of supporting the local industry through appropriate tax supportive measures and other tax dispensations,” said Minister Ncube.
“On the expenditure side, Government spending will be contained within sustainable levels, avoiding recourse to central bank overdraft facility and expenditures outside the Budget.”
Minister Ncube said since the inflationary environment has eroded wages and incomes in general, priority should be accorded to cushioning both public and private sector employees through appropriate and sustainable review of incomes and general working conditions, as the economy recovers.
He said civil servants will have their employment costs reviewed “in a sustainable way within the tax revenue resources”.
A stable macro-fiscal environment, Prof Ncube said, would pave way for the completion of mono-currency reforms, resolve prevailing cash shortages and boost confidence in the local currency.
“Consequently, the RBZ will continue implementing a tight monetary policy regime that anchors inflation expectations and stabilises the exchange rate. Reserve money growth will therefore be maintained at a target of 10 percent per annum.
“Other supportive measures to the mono-currency include: curbing speculative borrowing through appropriate interest rates adjustments (currently increased from 15 percent to 50 percent then further to 70 percent for the RBZ overnight window); regulating unethical practices on the Stock Exchanges and Bureaux De Change (e.g placed a vesting period of 90 days for dually listed shares); strengthening the recently established Reserve Bank Monetary Policy Committee and new RBZ Board and supporting interbank market through initiatives such as the USD denominated savings bonds currently at 7,5 percent interest rate,” he said.
The minister said to enhance the virtues of macro-economic stabilisation, Government will pay more attention to promoting productivity.