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Farirai Machivenyika Senior Reporter

THE decision by Government to allocate more money and a higher proportion of revenue towards salaries and benefits for civil servants in the 2023 national Budget has been praised by Parliament’s Budget, Finance and Economic Development Committee.

In a report on the Budget, Committee chairperson and Buhera Central legislator Dr Matthew Nyashanu said the committee noted with appreciation a 164 percent increase in the provision for employment costs from $833 billion in 2022 to $2,2 trillion in 2023.

“The increase will go a long way in cushioning the hard-working Government employees, who for long, have been paid salaries below the poverty datum line, estimated at $27 297,53 per person or $163 785 for a family of six as of September 2022.

“The committee therefore calls on Government to design appropriate packages for public sector employees and expeditiously address their grievances in order to minimise disruptions to service delivery.

“On their end, the workers need to negotiate from a moral viewpoint realising that continued industrial action while accepting salaries is unethical,” Dr Nyashanu said.

The committee also thanked Finance and Economic Development Minister Professor Mthuli Ncube for incorporating most of Parliament’s recommendations into the 2023 Budget.

The Budget office estimates the uptake to be 64 percent up from 54 percent in 2022, although total bids submitted to Treasury by various ministries and departments are much higher than the capacity of revenues and borrowings to meet these.

However, the committee was unhappy with the failure by Prof Ncube to adjust tax bands for workers.

“The committee noted with concern that the Budget did not review the tax-free threshold from US$100 or $75 000 per month, with the highest tax rate being 40 percent for US$3 001 or $1 000 001 and above and the exempt bonus of US$700 or $1 000 000 per annum. The committee also observes a disconnect in the tax bands for US dollars and Zimbabwean dollars. The committee calls upon the Ministry to review these tax bands every quarter in line with inflation trends, exchange rate or total consumption poverty line movements. This will reduce the effects of bracket creep which imposes a higher tax burden on workers,” said Dr Nyashanu.

On the intermediated money transfer tax, the committee welcomed the proposal to exempt from IMTT the transfer of funds to farmers when selling wheat approved by the Agriculture Marketing Authority between September 1, 2022 to March 31, 2023.

However, Dr Nyashanu said the Committee was concerned that the IMTT tax-free thresholds have not been reviewed from $2 500 or US$5 for individuals and for corporates from $3,3 million on transactions with values exceeding $165 million despite the erosion of value because of inflation.

“The committee, therefore recommends revision of the IMTT minimum threshold to $10 000, or US$15 if the tax relief measure is to make a meaningful impact on the lives of the people,” he said.