Industry Makes U-Turn, Urges Nation To Accept Mthuli Ncube's "Shock Therapy" Of 2 Percent Tax
The Confederation of Zimbabwe Industries (CZI) has made an about turn and urged the nation to support Finance Minister Mthuli Ncube’s 2 per cent tax on money transfers. The CZI had originally opposed the tax saying that it was going to have devastating effects on the economy as it would cut into business’ margins. Addressing the media on Friday, CZI president Sifelani Jabangwe said,
CZI was therefore initially opposed to an uncapped 2% tax and had proposed a cap which would achieve the aim of widening the tax base without over taxation. However, given the gravity of the current crisis in confidence, we recognise that it is vital that the fiscal deficit is dealt with immediately…The 2% tax, as subsequently modified by the Minister of Finance on 5 October, with further adjustments in consultation with the private sector, should go a long way towards closing the fiscal deficit and restoring stability to the economy… We, therefore, call on all stakeholders to accept this painful necessity to stabilise the economy.
The CZI also said that the government should become fully transparent about its expenditures and borrowing to prevent the situation from occurring again.