Key 2018 Budget Highlights

 Key 2018 Budget Highlights

HARARE, December 7 (The Source) – Finance minister Patrick Chinamasa on Thursday presented the country’s 2018 budget which focused on cutting government spending. We give you the highlights.

  • Gross Domestic Product (GDP) growth is projected at 4,5 percent in 2018.
  • Total expenditure for 2018 projected to reach $5.74 billion while revenue seen at $5,07 billion.
  • 2018 budget deficit projected at $675,8 million.
  • Employment costs at $3,27 billion and capital expenditure at $1,16 billion translating to 5,51 percent GDP.
  • Tax revenue collections are estimated to account for $4,3 billion of inflows while Non-tax revenue for 2018 is estimated at $237 million.
  • Collections from Retention Funds across all ministries are estimated at $434 million.
  • Inflation is projected to be at 3,01 percent in 2018.
  • Power generation projects exempt from Corporate Income Tax for the first 5 years, and a Corporate Income Tax rate of 15 percent thereafter.
  • Electricity generation expected to register growth of about 14,6 percent.
  • More than 3,000 posts of youth officers abolished.
  • Recruitment freeze maintained across the board, save for critical posts, as determined by treasury in conjunction with service commissions.
  • Government to retire staff above the age of 65.
  • To reduce size of delegations and close down some embassies.
  • Government to pay civil servants 2017 bonuses ($176 million) on a staggered basis.
  • $132,2 million set aside to support the 2018 general elections.
  • Extension of duty facility on capital equipment imported by approved medical institutions and practitioners, with effect from 1 January 2018.
  • To levy bookmakers 5 percent of gross takings with effect from 1 January 2018.
  • Ring-fencing of $5 million from presumptive taxes for the formalisation of traders and vendors and on-lending to small and medium enterprises.
  • Suspension of duty on raw milk facility for a period of 24 months, in order to augment domestic production.
  • Goat and sheep meat exempted from VAT, with effect from 1 January 2018.
  • Customs duty on cotton fabric increased from 10 percent, to 30 percent plus $2,50 per kilogram, with effect from 1 January 2018.
  • $182,4 million to support housing development.