Nkosana Moyo dismisses Mthuli tax reforms

HARARE – Former Industry and Trade minister Nkosana Moyo has dismissed Finance minister Mthuli Ncube’s tax reforms, noting that they do not address the real stem of the economic crisis, which is government’s overspending.

The professor, who is part of the technocrat Cabinet appointed by President Emmerson Mngangagwa after a contested election victory, implemented a controversial two percent tax for every dollar spent on electronic transactions which he later revised.

According to the adjustments, the tax regime will only apply to those with transactions of $10 and above.

In a statement, Moyo, the leader of a political outfit, Alliance for the People’s Agenda, said the Finance minister was aware of the impossibility of cutting down government overspending.

He said the minister was now mixing a number of sources including the biting taxes to fund the exorbitant government expenditure and reduce external borrowing.

“The minister is trying to change the mix of the sources of government funding as well as reduce the quantum of borrowing. In principle there is nothing wrong with that objective. The trouble is that he has rushed to increase taxes without thinking through the implications on the economy,” he said

“Raising the transaction tax creates opportunities for more spending rather than cutting down on spending. It also shifts responsibility to the already overtaxed citizen rather than putting pressure on the administration to cut down on wasteful spending.

“Over and above it being wrong to start with increasing taxes, this action also has the added effect of shielding government from the need to take immediate action on reducing public spending. I suspect the Honourable Minister knows he will not be able to bring down government spending.”

Moyo said the reduction of purchasing power will only downplay the local production sector and encourage importing.

“From an economic perspective one would have expected him to leave more purchasing power in the hands of the consumer so as to create a demand pull for local production. Reducing purchasing power will lead to consumers looking for the cheapest sources for their needs. We all know those sources will not be Zimbabwean!”

The former minister who resigned in 2001, under former president Robert Mugabe’s administration, is familiar with the “tight shoes” that the current Finance minister is wearing.

Like Ncube, Moyo was appointed soon after Zanu PF won a heavily disputed election in 2000.

His appointment was hailed by many as the dawn of a new era, the introduction of technocrats into government, breathing a new thinking and better ways of doing things.

Moyo indicated in his resignation that he could not function in a government led by unprincipled people.

In his recent statement, he highlighted how former Finance ministers, Bernard Chidzero (now late) and Patrick Chinamasa had also failed to sail in the similar boat, with a head of State who does not put the economic agenda ahead.

“Generally speaking, saying I told you so is not a good thing, but I would like to use this event as a reminder of something we really need to understand…Chidzero was a good and competent man.

“But as we all know, his political masters had no capacity to understand hence no commitment to implement what needed to be done,” said Moyo.

“Another example I witnessed was Chinamasa when he was working in his area of competence. As minister for Legal and Parliamentary affairs he tried to be professional and do the right thing even towards MDC, but his masters only understood a political agenda. I mention these two cases to make Zimbabweans understand that until we have a head of State whose agenda is not politics first and economics a poor second and also has first-hand competence in business, we are unlikely to sort out our economic challenges.”

When he quit office, the former minister was criticised by Mugabe for being a coward.

“I do not want ministers who are in the habit of running away. I want those I can call amadoda sibili (real men), people with spine,” the former president was quoted saying.

Moyo is a politician and economist, who holds a PhD in Physics from the Imperial College (University of London).

When he quit his ministerial post in 2001 he went to join his family in South Africa.

Comments (7)

I think Mthuli Ncube is doing a good job. Tax reforms, trimming of civil service, privatisation of parastatals etc were long overdue. He needs to go further fast and allow the incoming ZIMRA board to levy wealth tax on real estate. Money corruptly obtained was either externalised or invested in houses. Its difficult to trace externalised money or catch those who have invested in properties in Zimbabwe. Some have built houses with 10 or more bedrooms without mortgages and they cannot prove sources of their cash. Of course there are others who have acquired wealth in an honest way. I think all properties in Zimbabwe from a minimum value of $50 000 should be levied a ONCE-OFF wealth tax of 5%. Those who acquired properties but cannot explain source of cash must pay wealth tax of 95% of the market value of the property. If one fails to pay, they must lose the property. This is better arresting someone because he can win a case in court on a technicality. Lets give professor Mthuli a chance.

Edgar Muzawazi - 10 October 2018

Nkosana the physicist :-)...regerai va Ncube vamboita he has been in the job for not more than a month....ndiwo majerasi ka aya?. Chii chavatadza ?. The forces that are behind the economic problems are against him- Ma genga anoita mari nekutambura kwevanhu havasikumbomufarira. Ndovarikuti havasikuda tax on transactions which will affect business than individuals...ko munodii kukomburena kuti ma bhengi arikukubatirayi , their fees are the highest in southern africa ?.

Ncube is OK - 10 October 2018

Mthuli Ncube is doing a wonderful job - period

Mentalist - 10 October 2018

Nkosana must do another PHD , in finance , economics or sit for CT7/CT8 papers in the profession , kuyanceda. Its better than reading for a Phd in physics. I don't do all that though , vamwe tinenungo...asi mari hobho.

Lost Moyo - 10 October 2018

Typical of Zanu pf blinkered supporters.It is so idiotic to say that Mthuli Ncube is doing a good job when there is absolutely nothing to show on what he has done so far besides adding pain to an already bleeding injury.When it comes to Zanu pf these goons do not see or hear any evil.Mthuli Ncube was in a hurry to please his master by adding more tax to the burdened citizens.We could have given him a benefit of doubt if he was appointed by another political party,not zanu pf.The zanu pf president showed his penchant for spending money that he does not have when he used govt funds to charter a private plane for Grace Mugabe when back home people were dying of cholera due to unavailability of medicines and ironically Grace had gone to Singapore for medical reasons.The fact that not a single govt thief has been convicted of stealing and corruption speaks volumes about the kind of a person Mnangagwa is.I guess it is case of a black pot avoiding to call other pots black.Whether you like it or not all you zanu pf supporters,Mnangagwa is pfeee muhupfu and you and your loved ones will always languish in abject poverty until you open your cotton picking minds.You did the same with Mugabe,and you never saw anything wrong with him for 37 years even when it was crystal clear that he was taking the country into an endless pit.Handei tione!

Janana wa Bikaz Bikela Bikaldo - 10 October 2018

we all rush to make unnecessary comments but most of you guys doesnt know how an economy functions.give those in authority time and see how they are going to fix the economy.

ngonidzashe foto - 10 October 2018

Those who say we must give the Zanu administration time are crazy too like Zanu itself. Time to do what? In 2009 during the GNU Tsvangirai and team did not ask for time to stabilise the economy. We saw prices falling like roller costers , medicine was suddenly full in hospitals, shops had their shelves filled overnight, civil servants smiled all their way to the bank. Now the Zanu cruel regime tells the poor to be over taxed and fund their luxurious life styles. They are selfish, cruel and heartlless. The country is full of nnatural resources with world largest lithium resources ,world second largest platinum, world largest methane gas reserves, world most peaceful and hardworking people but we continue to cry year after year because of Zanu looters. This is unfair. Zanu looted and destroyed Zimbabwe and now they put heavey yokes on poor Zimbabweans necks

MERCY - 11 October 2018

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