Harare, Zimbabwe (News of the South)-Zimbabwe is currently caught in a recessionary economic period that has no room for the taxing of the informal sector as has been done by the government, according to one expert.
Government recently gazetted new measures that entail saloons, commuter traffic and cross border traders be taxed as the country tries to fund a broke fiscus.
According to the Finance Act 2017 in the Government Gazette, informal cross border traders “will pay ten percentum of the value for duty purposes of the commercial goods being imported”
“Operators of omnibuses for the carriage of passengers with a seating capacity for 15 to 25 passengers will be required to $45 while those of between 25 and 36 passengers will part with $70 a month”, it said.
However Lawyer and People’s Democratic Party leader Tendai Biti has castigated Finance Minister Patrick Chinamasa for the move saying it defies economic logic.
“The proposed taxation of the informal sector is both callous cruel and totally against economic logic Zim is in a recession for Christ’s sake”.
“Desperate Chinamasa should attend to real reforms & not tax an overburdened poor populace without substantive jobs”.
“Presumptive taxes on the informal sector are retrogressive &will further whittle non-existent aggregate demand leading Zim into a depression”.
“Someone should buy Chinamasa a basic text book on Keynesian economics”, he said.
Biti added that the rule of ZANU PF was the biggest reason why they was little to none Foreign Direct Investment into the country and an executive change would yield positive results.
“FDI is not flowing into Zim because of toxic & predatory ZANU politics. Remove ZANU & billions will pour into this economy”, he said.
The former Finance Minister in the Government of National Unity (GNU) added that “the US$ is the sole currency of trade in Zimbabwe’ and no one should get confused by ‘the phrase about the existance multi-currency, saying it’s ‘irrelevant when it comes to the current account’.
Pointing to recent reports that Malawi’s Merchant Bank is looking to buy Barclays Bank, Biti said the move is a revolt against the economics of President Mugabe’s government.
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