Finance Bill sails through Senate

Mthuli Ncube on the budget day

HARARE – The Finance Bill and Appropriation Bill which seek to give legal effect to the 2020 National Budget delivered by Finance and Economic Development Minister Mthuli Ncube sailed through Parliament yesterday.

Both Bills now await the assent of the President.

According to the State media Finance Bill seeks to give legal effect to various fiscal measures unveiled by Minister Ncube when he presented his 2020 Budget statement while the Appropriation Bill will give legal force to the Budget votes allocated to different Ministries and Government departments.

During the second reading debate of the Finance Bill on Tuesday in the National Assembly, Harare East MP Mr Tendai Biti (MDC-Alliance) said the Bill was “imprudent” in that it seeks to empower the Zimbabwe Revenue Authority Commissioner-General to exercise some discretion on the exchange rate when levying duty and tax accruing from disposal of an asset.

He said levying of duty on some goods in foreign currency defeated the concept of a mono currency.

“The whole purpose of law and policy is certainty. It is to mitigate the life of a citizen. If you have a law that applies differently to different people to different classes, it is not a law. A law according to the founders of positivist jurisprudence, people like Jeremy Bentham and Thomas Aquinas, the law is something that is fixed, something that is certain, something that is predictable and applies to everyone,” said Mr Biti.

“The interbank exchange rate is the official exchange rate in Zimbabwe, it is not Fourth Street. The interbank rate is the rate in which an individual like you and me can go and sell our foreign currency at the bank. Now, what this provision seeks to do is to introduce another exchange rate which is in the discretion of the Commissioner-General.”

In response, Minister Ncube said the Bill provides that Zimra will fix the exchange rate in consultation with the central bank.

“If you read that clause, it says the customs exchange rate will be a rate determined in consultation with the Reserve Bank of Zimbabwe. The rate that the Reserve Bank will advise the Commissioner-General on is the market rate which is the inter-bank rate. So there is no inconsistency at all. So there is no deviation from the advice of the Reserve Bank,” said Minister Ncube.

He said payment of capital gains tax only related to circumstances when one would have misled Zimra on the currency received following disposal of an asset.

“The tone of this paragraph is not negative at all. In fact, if you were to read the entire Finance Act you will find that it does not make a difference and it emphasises the need to pay your taxes in Zimbabwe dollar.

“This insertion is mainly saying that if you do not comply with that and then you hide the income that you have earned in United States dollar and you claim it is Zimbabwean dollar when it is not, we will ask you to pay in United States dollar, because you are hiding that information. So this is a deemed provision in the Act,” the Minister said.