Finance Minister Patrick Chinamasa on Thursday introduced new revenue measures and increased levies on luxury goods such as vehicles to improve dwindling state coffers.
In his mid-term fiscal policy review, Chinamasa increased excise duty on vehicles saying the importation of vehicles was harming the local motor industry which is operating at below one percent.
He said he will levy five percent excise duty on airtime for voice and data with effect from September 15, 2014. Another five percent levy was imposed on mobile phone handsets.
Fuel prices are set to go up after the minister increased customs duty with effect from this month.
Chinamasa said fringe benefits will now be taxed. Several top executives in both the private and public sectors get huge benefits some bigger than their salaries and these have not been taxed for years.
These and other measures, Chinamasa said, would also boost state coffers as well as improve the local industry that has been adversely affected by imports.
He said government was raising funds to support local industries.
The minister noted that investors had shown a lot of interest in Zimbabwe and the country needs to revise and clarify its controversial indigenization policy to lure these investors.
Zimbabwe, he said, has started servicing its debt with multilateral institutions and would soon pay back loans owed to the European Investment Bank as the country moves to re-establish relations with the European Union.
He said the government is committed to ensuring food security and is mobilizing millions of dollars to support farmers with inputs under the Presidential Input Scheme.
Chinamasa said revenues collected for the first half of the year, at $1.7 billion, is far below the projected $1.8 billion, adding that 76 percent of this money is going towards employment costs, leaving little for operations.
The finance minister said exports had gone down to $1.2 billion for the first half this year compared to $1.5 billion last year. Imports stand at $3 billion compared $3.9 billion the previous year.
Chinamasa said due to the non-performance of key sectors of the economy such as mining, economic growth has been revised downwards from 6.1 to 3.1 percent.