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Trade Unions Pan Tax-Relief Proposals in Zimbabwe FM Biti's 2010 Budget

Map of Zimbabwe
Map of Zimbabwe

The Zimbabwe Congress of Trade Unions and the Zimbabwe Teachers Association criticized the finance minister's tax proposals saying that they provided no relief to the vast majority of Zimbabwean workers

Zimbabwean Finance Minister Tendai Biti's 2010 budget, unveiled Wednesday, has drawn fire from some Zimbabwean trade unions which the level of income at which no tax is paid is well beneath the country's poverty line.

Under the proposal, incomes under US$160 a month will not be taxed. However, most Zimbabweans are not currently earning more than that amount.

The Zimbabwe Congress of Trade Unions - the country's largest confederation of labor organizations - and the Zimbabwe Teachers Association added that the tax break on the end-of-year bonus for 2009 was irrelevant for most state workers who by and large earn less than US$160 a month.

Teachers Association Chief Executive Officer Sifiso Ndlovu, told VOA Studio 7 Gibbs Dube that the tax-free income and bonus tax break would benefit only the relatively few workers earning more than US$500 a month.

Economist Eric Bloch said the tax thresholds set in the Biti budget did not make sense, calling them "ludicrous" and "insignificant in the extreme."

Others were more complimentary - former finance minister Herbert Murerwa, now holding the Lands portfolio, praised Biti's budget after it was presented to Parliament on Wednesday, and German Ambassador to Zimbabwe Albrecht Conze said it was an impressive plan to revitalize the economy.

Biti proposes to spend US$2.25 billion next year while projecting revenues of US$1.44 billion for a deficit of US$810 million to be closed with funds from international donors and drawing down a recession-recovery credit facility of several hundred million dollars at the International Monetary Fund.