Finance minister Patrick Chinamasa today presented the country’s 2018 budget which focused on cutting government spending.
Here are the highlights.
- Gross Domestic Product (GDP) growth is projected at 4.5 percent in 2018.
- Total expenditure for 2018 projected to reach $5.74 billion while revenue seen at $5.07 billion.
- 2018 budget deficit projected at $675.8 million.
- Employment costs at $3.27 billion and capital expenditure at $1.16 billion translating to 5.51 percent GDP.
- Tax revenue collections are estimated to account for $4.3 billion of inflows while Non-tax revenue for 2018 is estimated at $237 million.
- Collections from Retention Funds across all ministries are estimated at $434 million.
- Inflation is projected to be at 3.01 percent in 2018.
- Power generation projects exempt from Corporate Income Tax for the first 5 years, and a Corporate Income Tax rate of 15 percent thereafter.
- Electricity generation expected to register growth of about 14.6 percent.
- More than 3 000 posts of youth officers abolished.
- Recruitment freeze maintained across the board, save for critical posts, as determined by treasury in conjunction with service commissions.
- Government to retire staff above the age of 65.
- To reduce size of delegations and close down some embassies.
- Government to pay civil servants 2017 bonuses ($176 million) on a staggered basis.
- $132.2 million set aside to support the 2018 general elections.
- Extension of duty facility on capital equipment imported by approved medical institutions and practitioners, with effect from 1 January 2018.
- To levy bookmakers 5 percent of gross takings with effect from 1 January 2018.
- Ring-fencing of $5 million from presumptive taxes for the formalisation of traders and vendors and on-lending to small and medium enterprises.
- Suspension of duty on raw milk facility for a period of 24 months, in order to augment domestic production.
- Goat and sheep meat exempted from VAT, with effect from 1 January 2018.
- Customs duty on cotton fabric increased from 10 percent, to 30 percent plus $2.50 per kilogram, with effect from 1 January 2018.
- $182.4 million to support housing development.