By Dennis Ndlovu|Zim GBC News
Finance Minister Prof. Mthuli Ncube responded to MPs’ budget concerns on Wednesday, confirming a reduction in gold royalties while defending the controversial VAT increase.
In a detailed reply to committee reports, Ncube announced that the proposed 10% royalty rate for gold would be lowered.
“We are going to reduce the upper end from 10% to something lower than 10%,” he said, acknowledging concerns that the rate was excessive and could disincentivize miners.
On VAT, which was raised by 0.5%, Ncube stood firm.
“We are at 15.5%. We are still within some of the VAT rates in some of these countries,” he said, citing Zambia (16%) and Tanzania (18%). He emphasized that 14 core commodities for low-income groups remain zero-rated.
Ncube also addressed calls to increase funding for the Ministry of Industry and Commerce, stating,
“We will look into that as we come to the vote appropriations.”
However, he dismissed the need for a separate Pharmaceutical Revolving Fund, calling it redundant.
Other key takeaways included:
· A rejection of equalizing IMTT rates between USD and ZiG transactions to maintain ZiG’s advantage.
· Support for gold liberalization, allowing citizens to hold gold as an asset.
· Adjustments to bank withdrawal charges following public feedback.
The Minister also pushed back on setting a fixed date for phasing out the US dollar, warning it disrupts contracts.
“The moment you introduce a year economic agents start using it as a contracting date,” he said.
Despite MP complaints about repetitive debates, Ncube praised the committee reports and moved for the budget to be read for the first time.
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