“Shocking evidence of tax leakages hogged the limelight this week, with Finance and Economic Development minister Mthuli Ncube saying the informal sector, which makes up 70% of Zimbabwe's gross domestic product (GDP), was remitting less than 1% in taxes,” wrote Eddie Cross.
“This
explains why the ailing economy has been struggling with crumbling public
infrastructure, while social security interventions are grounded. It also
reveals how a cluster of interventions unveiled three years ago to pin the
informal sector to pay taxes failed to yield results.”
There
is nothing shocking about the informal sector contributing only a paltry 1% in
collected revenue. Most of the people in the informal sector live from hand to
mouth selling tomatoes, airtime and all manner of trinkets by the roadside.
Most of these people are not earning enough to pay for their basic needs and
should be on social welfare support.
However,
this government has revalued the informal sector for the purpose of boosting
the nation’s GPD and so came up with the result of 70% GDP is the informal
sector. And the regime even devise ways of collecting tax from the informal
sector.
So,
70% of Zimbabwe’s GPD is contributing a paltry 1% in tax; this must be yet
another world record!
Zimbabwe’s
economy shrunk by a record 50% in the period 2000 to 2008. The country’s
inflation peaked at 500 billion percent in 2008, a world record for a country
not at war, on the back of the collapsed agricultural sector and the regime’s
voodoo-economic policy of printing money to bankrolling its reckless spending.
The
Zimbabwe economy had been “ailing” because of decades of Zanu PF gross
mismanagement and rampant corruption and the economic chaos of 2000 to 2008 delivered
the knockout punch from which it has never recovered.
Indeed,
it is now clear Zimbabwe’s economy will never recover, as long as the country
remains a pariah state ruled by corrupt, incompetent and murderous thugs who
rig elections to stay in power.
The truth is there is no wealth in the informal sector and the claim it is contributing 70% GPD is just an outrageous claim. The informal sector is failing to contribute even 1% in tax revenue because you cannot collect tax from an imaginary resource much less use the imaginary tax to bankroll economic recovery.
In 2012 the late Edward Chindori-Chininga shined some light in the nature of the informal corporations in the diamond mining industry. The holders of the Marange and Chiadzwa diamond mining concessions were not required to keep any records on quality and quantity of the mined diamond, to whom the diamonds were sold and for how much, how the diamonds were shipped out of the country, who shared in the proceeds and how much they received, etc., etc. This allowed the holders of the mining concessions to earn vast wealth without ever declaring it or paying a single dollar in corporation or individual tax.
ReplyDeleteIn 2016 then President Robert Mugabe admitted Zimbabwe was “being swindled out of US$ 15 billion in diamond revenue alone” and thus underlining just how lucrative these diamond mining concessions were to the holders. He never arrested one swindler nor recover one dollar of the swindled diamond fortune. Worse still the swindling never stopped.
Mugabe booted out of the country the Chinese, just one of the foreign nations involved in the wholesale looting in Marange and Chidzwa. The looting continued as confirmed by Mugabe’s Minister of Finance, Patrick Chinamasa, who told parliament in 2017 that government was getting 1/6 of the expected diamond revenue.
When Mnangagwa took over from Mugabe following the November 2017 military coup, he promised “zero tolerance on corruption”. He has yet to arrest one diamond swindler and recover one swindled dollar.
Indeed, one of the first thing Mnangagwa has done was to allow the Chinese swindlers back in the country and back in Marange and Chiadzwa – reward for the Chinese’s help in the November 2017 coup and in rigging the July 2018 elections. The lucrative diamond mining concession have been extended into gold and platinum mining, fuel procurement and even the procurement of corona virus materials as happened with the Drax scandal!
It is an outrage that people like Finance Minister Mthuli Ncube and their cheerleaders like Eddie Cross have gone after the poorest of the poor, the street vendors, defining them as the generators of 70% of the nation’s GDP and tax they little they have. How cynical that Eddie Cross had only one sentence for all the wholesale looting that is the root cause of Zimbabwe’s economic meltdown.
“But the country has one of the region's weakest revenue collection systems, failing to police big corporations that have emerged informally, earning bigger revenues than some formal players,” admitted Eddie Cross. That is all he had to say!!!!
How naive, that the regime expects to bankroll economic recovery from taxes collected from the impoverished millions whilst the filthy rich ruling elite are allowed to continue looting! We need democratic change to end this madness!
If there is one individual giving Zanu PF chefs sleepless nights it is Julie. As much as the Zanu PF chefs would like to think that they are in control of everything in Zimbabwe, Julie's mocking laugh tells them otherwise!
ReplyDeleteGovernment workers on Wednesday rejected a staggered salary hike of 25 percent this month and 45 percent in July for a cumulative total of 70 percent.
ReplyDeleteTeachers warned they would work a three-day week when schools re-open after the Easter holidays.
Soaring inflation has eroded salaries and savings as Zimbabwe grapples with a major economic crisis marked by shortages of foreign exchange, food and high unemployment.
The Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU), formerly known as the Apex Council, said "the offer does not address the urgent need to capacitate workers and is not based on any formula related to the cost of living or the food basket."
"The workers wanted the employer to be sincere about implementing the November 2020 National Joint Negotiation Committee resolution to craft a roadmap towards the restoration of the value of wages to the pre-October 2018 levels, which resolution should have been actualised in January 2021," said the ZCPSTU in a statement following talks with government representatives.
Public sector unions want the lowest paid worker to be paid at least US$540, which they say was the salary level in 2018.
The latest pay offer from the government would see the lowest paid state employees getting Z$16,798 (US$199) a month in April, rising to Z$20,578 (US$243) from July.
Zimbabwe’s economic decline started soon after independence in 1980 and has gather pace over the years. Whilst Mugabe maintained that his scientific socialism would bring mass prosperity, “Gutsva ruzhinji!” as he called it; the reality on the ground said the opposite, mass poverty.
By the early 1990s it was increasing clear that Zanu PF misrule was destroying the nation’s once promising economy. However, all efforts to remove Zanu PF from office were futile because the party rigged the elections. The prognosis was self-evident; if we want a prosperous nation then we must have a competent government, we must stamp out the nonsense of rigging elections.
It is everyone’s duty and responsibility to safe-guard the individual freedoms and rights including the right to free, fair and credible elections. Zanu PF has rigged the elections for the last 41 years and got away with every time because we, Zimbabweans, have paid lip service to demands for free and fair elections. Each time Zanu PF blatantly rigged the elections we pretended not to notice!
The teachers, nurses and all the other civil servants now demanding a living wage have done little to demand good governance and continue to ignore the reality on the ground – decades of Zanu PF misrule have brought this nation economic ruins. They are going on strike to be paid a living wage regardless of the reality the Zimbabwe economy is in ruins. How naïve!
The low-ranking soldiers, Police, CIO and Prison Service are being paid more than the teachers and nurses and so they still think good governance is not important. As the economy continues to sink, they too will be asking for a living wage and send back home empty-handed just as is happening with the teachers.
There is no mass prosperity without good governance! It is sad that the penny has yet to drop, even now with the country standing on the edge of the abyss!
@ Koni
ReplyDelete“The main Zimbabwean opposition party has started mobilising for he 2023 election and it looks like there shall be no any kind of a dialogue between the two giant political parties Zanu PF and MDC -Alliance.
The One Million Campaign is likely to recruit more cadres The MDC Alliance is also mobilizing the citizens for a grand convergence for change under the people's agenda, reform agenda governance agenda broad and global agenda.”
I totally agree with you that the Zimbabwe economic is in total meltdown and to win the 2023 election, Zanu PF will be resorting to cheating and wanton violence.
I do not agree with the view that MDC A is fighting for the “people agenda and reform agenda”. MDC leaders had the golden opportunity to implement the democratic reforms during the GNU and they failed to implement even one reform in five years.
Ever since their betrayal during the GNU, MDC leaders have participated in flawed and illegal elections giving Zanu PF legitimacy. The MDC A is gearing to participate in the 2023 elections undermining the voices of all those who are calling for the implementation of reforms and break this foolish cycle of rigged elections and the opposition crying the elections were rigged!
The suggestion that participating in flawed and illegal elections is the people’s agenda is insane as it shows you are incapable of learning from the past!
Gutu, who was recently paraded by President Emmerson Mnangagwa when he crossed the floor to Zanu-PF together with former MDC Alliance senator James Makore, made the utterances during an interview with Alpha Media Holdings' Heart and Soul TV (HStv).
ReplyDelete"I put my money on Zanu-PF. There is no political party in this country that can beat Zanu-PF in any free and fair election. I have done my studies, I have done my analysis and I have looked at the numbers," Gutu said
Considering Zanu PF has never held free, fair and credible elections the person interviewing Gutu should have asked why Zanu PF had never held free and fair elections if the party was as popular as he claimed.
Unless Gutu believes the July 2018 elections were free and fair, then he should have been asked how an election in which there is no verified voters’ roll, 3 million in the diaspora are denied the vote, etc. can ever be a free and fair election.
The very fact that Obert Gutu has no clue what constitutes free, fair and credible elections and he is not alone in this; all his former MDC colleagues are no wiser; explains why MDC has been on the political stage for 21 years, 5 of which in the GNU, and yet have failed to bring about even one democratic change!
"Those opposed to the principle of constitutionalism and unity of the MDC have chosen to target me as a person and not the principle that I espouse. They prefer not to play the ball but harm a player. All done to give politics a dirty name when it is simple greed, manipulation and lack of character. Against this backdrop, it is silly and mischievous if not devious too, to suggest that Abednico Bhebhe has joined the MDC Alliance."
ReplyDeleteBhebhe maintained that he remained where he has "always been and consistently so since 2017 when the discord began."
"I stand for the unity of the MDC which is the only avenue to consign Zanu-PF to the dustbin of history come 2023. Out of ignorance or malice, perhaps a combination of both, some have created an impression that I have hop-knobbed from one party to another," he said.
"As far as I am concerned, I have stood by my beliefs which have not changed, and they are not about to change. I have worked with progressive people across the factional divide, and I do not regret it and will continue to do so as long as that would yield a stronger opposition against the heinous Zanu-PF."
Abednico Bhebhe has earned the respect of many thinking Zimbabweans out there for being one of the few MDC leaders to ever admit all is not well in the opposition and that greed is a serious problem. Most of his fellow MDC leaders have their heads buried in the sand and are always looking for scapegoats to blame, just like what Zanu PF is doing!
MDC leaders have proven to be corrupt and breathtakingly incompetent that puts them beyond the pale.
The real tragedy is that the Zimbabwe electorate are a naïve and gullible lot, even now with the benefit of hindsight most Zimbabweans still do know what the GNU was about much less understand that MDC leaders sold out. This is why many of them continue to follow MDC leaders blindly like sheep to the slaughter hence the reason the country is in this mess.
THE socio-economic crisis bedevilling the country is untenable and demands that the two major political parties - Zanu-PF and the MDC Alliance - hammer some kind of deal that will help better the lot of citizens who are now burdened beyond measure by the two protagonists' endless bickering, while the country is on fire.
ReplyDeleteThe clergy has since the runup to the July 30, 2018 poll been pushing for dialogue and I hope both parties will see wisdom in that. There is an urgent need to inclusively map the way forward.
One thing for certain is that no single political party has the capacity to extricate the country from the current mess, which is why the church has seen wisdom in bringing the two parties to the negotiating table so that they hammer out some kind of deal.
Although MDC Alliance leader Nelson Chamisa has insisted that he will not be lured into that kind of deal which will virtually have him "swallowed" by Zanu-PF, he must be reminded that, of course, his life will go on comfortably, but the majority of his supporters will pay a huge price for whatever is going on, which makes concession a better devil.
Zimbabwe is in this mess because for the last 41 years the country has been stuck with a corrupt, incompetent and tyrannical regime – Zanu PF. The people have failed to remove Zanu PF from power because the party rigged elections.
The people have risked life and limb to elect MDC into power in the desperate hope the party would bring about meaningful democratic change and deliver the free, fair and credible elections the nation has literally been dying for! Morgan Tsvangirai and his MDC colleague had the golden opportunity to implement the democratic reforms and end the de facto one-party dictatorship once and once for all. They wasted every opportunity; they have failed to implement even one democratic reform. Not even one!
Zimbabwe is in this economic and political mess precisely because of decades of gross mismanagement, rampant corruption and rank lawlessness by the corrupt, incompetent and tyrant Zanu PF and the equally corrupt and incompetent MDC. Zanu PF and MDC are the problem! They cannot be the solution when they are the problem!
The solution is for the country to implement the democratic reforms to allow for free, fair and credible elections, the only sure way to end this curse of rigged elections and bad governance. Just because Zanu PF and MDC will never implement the reforms does not mean free and fair elections and democracy are a lost cause.
“Exiled former Zimbabwe Cabinet minister Jonathan Moyo has suggested that former MDC-T spokesperson Obert Gutu could be a member of the dreaded Central Intelligence Organisation (CIO).”
ReplyDeleteMDC's pathetic performance during the 2008 to 2013 GNU, the party failed to implement even one meaningful reform in 5 years, does suggest there was a lot more than incompetent but otherwise innocent individuals who were then corrupted by Mugabe. Having a number of CIO double agents in MDC is something no one can dismiss lightly.
It is no secrete that Mugabe had two or three layers of spies to spy on his own Zanu PF leaders. If he spied on his own fellow party leaders, what more on the opposition!
The fact that MDC leaders like Morgan Tsvangirai were “flawed and indecisive characters”, as USA ambassador Chris Dell pointed out in a leaked cable to Washington, meant that MDC was really being organised and run from Zanu PF HQ.
MDC lost all political credibility when the party failed to implement even one reform during the GNU. The international community and SADC deserted MDC in droves after Zanu PF blatantly rigged the 2013 elections.
The only reason why many Zimbabweans have continued to support MDC to this day is because they are a naïve and gullible lot. They have never understood what the GNU was about and therefore have failed to grasp the enormity of the party leaders’ betrayal.
As long as the Zimbabwe electorate remain a naïve and gullible lot Zanu PF will drag this nation even deeper into the abyss. MDC will never bring about any meaningful change because Zanu PF runs MDC and the people will follow MDC blindly like sheep to the slaughter!
@Abednico Mwembe Mwembe
ReplyDelete“No.doubt about it he is a pure CIO after being shut out of MDC he decided to go back join his handlers . But these are the last days of his handlers and more misery will happen to him.”
Given MDC’s pathetic performance record; the party has failed to deliver even one democratic change in 21 years, 5 of which in the GNU; it is clear Obert Gutu was not the only CIO. There are many others still left in the party are right now they are busy telling the naïve and gullible MDC wildebeest herd the party is going to win the 2023 elections hands down! Not that the herd needs much persuading, they believe anything they are told no questions asked!
@ Bionic Vusa
Delete“But these are the last days of his handlers and more misery will happen to him.”
“You must know something I don’t coz it looks like the Zim opposition has run out of ideas as to how to remove Zanu PF.”
You are spot on there! Obert Gutu was not the only CIO in-plant in MDC there many others still in the party. The CIO in-plants’ job is to convince the MDC wildebeest herd that the MDC is set to win a landslide victory in the coming elections!
The party did not implement even one reform during the GNU because Gutu and company convinced everyone the party would win regardless! As party spokesperson it was Gutu who announced the party had devised “Winning In Rigged Elections (WIRE) strategies” before the 2018 elections.
MDC leaders have proven beyond all doubt that they are corrupt and incompetent but when you are as naïve and gullible as the wildebeest herd you follow blindly and ask no questions. It is shocking that any human being could be so shallow thick and slow but that is Abednico and thousands of other MDC supporters out there!