Zimbabwe Finance Minister Tendai Biti has unveiled a $2.25 billion national budget for 2010 in which he sought to strike a delicate balance between the requirements of an expectant business sector and a restive public keen to see a quick improvement in their living standards.
Delivering his first full budget since becoming Zimbabwe’s finance minister in February, Biti said the economy was forecast to grow by seven percent next year on the back of an anticipated improvement in manufacturing, mining and agricultural output.
Agriculture is forecast to grow by 10 percent in 2010 while the manufacturing and mining sectors are seen expanding by 10 and 40 percent, respectively.
Biti revised upwards the 2009 economic growth forecast from an initial 3.7 percent to 4.7 percent against a 10.9 percent decline in 2008.
He announced that Zimbabwe would cut the corporate tax rate from 30 percent to 25 percent in 2010 in a move meant to stimulate economic activity and act as an incentive to businesses that have avoided paying tax.
Biti said corporate tax had brought in a paltry four percent of total revenue in 2009 but was confident of improved compliance next year as a result of the tax cut.
He also announced an increase in royalties on precious metals such as gold and platinum from three percent to 3.5 percent from next year, while also reducing the size of mineral exploration concessions from 65,000 hectares to 20,000 hectares.
The top rate of personal tax was cut to 35 percent from 37.5 percent, while the tax-free threshold was raised slightly to $160 a month from $150 previously.
Biti extended the suspension of duties on imported food stuffs for a further six months until July 2010 and reduced the duty on passenger and light commercial motor vehicles to 25 percent from 40 percent.
Source African Press Agency
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