Zimbabwean Finance Minister Tendai Biti on Thursday announced a 3.8 billion U.S. dollar national budget for 2013, and that an increase of excise duty on alcohol and cigarettes will help finance the education sector.
Without giving actual figures on the increase of the excise duty, Biti said it was estimated that 11 million U.S. dollars will have been raised by end of 2012.
The minister expressed dismay over the huge import bill standing at 7 billion U.S. dollars in 2011, representing 8.6 percent of GDP against exports worth 4.49 billion U.S. dollars. He called for the protection of local products from an influx of imports from within the region and beyond.
But despite the huge import bill, the Zimbabwe Revenue Authority only collected 1.2 billion dollars in customs duty, Biti lamented.
Presenting what he termed a "demand driven" budget, Biti also bemoaned the high level of de-industrialization, absence of fiscal space, poor infrastructure, power shortages and a high unemployment rate especially among the youths, among others.
The economy, which has picked up since the formation of the inclusive government, is now on the decline with industrial capacity utilization, which had gone up to around 60 percent, going down once again to below 10 percent, he said.
A huge employment bill, currently at 73 percent of national budget and set to be increased in line with inflation, will gobble 2.6 billion U.S. dollars, leaving a paltry 700 million U.S. dollars for government operations and presenting a bleak 2013.
Biti, who also lamented the low revenue generated from diamond mining, called for the lifting of international sanctions on the local gems.
The tax-free threshold on bonuses was increased to 1,000 U.S. dollars, while no bank charges will be levied on deposits of 800 U. S. dollars and below. Biti also ordered banks to pay interest rates of a minimum 4 percent per annum on amounts of 1,000 U.S. dollars or more which sit in the banks for 30 days or more.