Key Points
- New taxes target sports betting, fast food, plastic bags.
- 10% tax on sports winnings starts January 2025.
- LPG VAT exemption aims to ease energy shortages.
On Tuesday, Mthuli Ncube, the minister of finance, economic development, and investment promotion, imposed additional taxes on taxpayers in an effort to increase revenue and fund the government’s expanding requirements.
Ncube proposes new taxes to raise revenue.
The first day of 2025 will see the implementation of the taxes. At the proposed Parliament Building in Mount Hampden, Ncube presented the Z$276.4 billion 2025 national budget, outlining the proposed tariffs on plastic bags, fast food and sports betting.
Ncube also suggested a 0.5% tax on the amount of fast food that eateries and retail establishments sell. He claimed that the government must encourage responsible food consumption as the consumption of highly processed foods has been connected to an increase in obesity and non-communicable diseases.
Additionally, starting on January 1, a 20% tax on plastic carrying bags will be implemented. According to Ncube, the new charge is a component of an initiative to promote the use of biodegradable packaging.
Changes to tax breaks for investors in special economic zones were another topic Ncube covered. A corporate income tax rate of 15% will take the place of the prior tax vacation for the first five years.
In order to level the playing field with ready-to-drink beverages, Ncube lowered the sugar tax on cordials in response to lobbying from beverage manufacturers. Beginning on January 1, the new tax will be US$0.0005 per gramme instead of US$0.001 per gramme.
LPG exempted from VAT amid energy crisis.
In an effort to lessen the effects of continuous power outages, Ncube also declared that liquefied petroleum gas (LPG) would not be subject to value-added tax (VAT). As the nation experiences rolling blackouts, he pointed out that LPG has emerged as a significant alternate energy source for heating and cooking during blackouts.
According to newsday, the government’s policy of keeping salaries below 50% of income is broken by this. According to Ncube, hiring would only be done in vital fields like education and health.
Ncube stated that the government would boost energy project financing to assist investments in infrastructure and power generation, but he gave few concrete solutions to the nation’s power crisis.
In order to alleviate the strain on the national power system, he emphasised new mining industry initiatives and the upcoming renovation of Hwange’s Unit 5.
In an effort to alleviate the energy scarcity, the administration also plans to build 100 mini-solar grids with Chinese assistance. According to Ncube, these initiatives will contribute to the improvement of the nation’s energy supply, as will agreements to build 1,500 megawatts of power by 2026.
