Lockdown brings Government to it’s knees
The Coronavirus has come with some huge costs for Emmerson Mnangagwa administration as lockdown extension has hit hard the national treasury. Zimbabwe will be closed for at least 35 days or more due to the virus outbreak.
When the lockdown started towards the end of March 2020 the government had not fully prepared for it. The lack of preparedness resulted in almost all formal businesses failing to file the monthly Pay as You Earn (P. A. Y. E) for the month of March. The P. A. Y. E is government much needed revenue source on top of other taxes that are charged.
Speaking to Dangwe News a senior official with revenue collector ZIMRA said all targets are off the rails at the moment. ‘The situation is really bad here as we are not collecting any revenue from ports of entry, VAT is always way down. The estimation is VAT which is value added tax has gone down by over 92% due to reduced activities with those operating only selling essentials’.
The transaction tax of 2% which is very unpopular has also taken a nose dive leaving the ever thirsty regime with few options but to print more money. Unlike in the Gono era where physical bank notes were more in circulation this time the printing is being done via the electronic RTGS system. Although our contacts at Fidelity Printers told us the printing press is running more faster than before lockdown. The idea is to only to use the notes as a last resort.
Last week the Harare administration gave the poor in the country at least ZW $180 per individual in order for them to get basics during the lockdown. This money was created using RTGS system as it was not budgeted for. ‘That money was created from thin air nothing to back it up at all, we will see many such in the coming days as most companies struggle to survive’. The official painted a bad picture warning things will get even worse as the administration runs out of forex to import food.
Zimbabwe is a long way to meet World Health Organisation (WHO) re-opening criteria as only 3475 tests were done by the 22nd of April 2020. With the peak season still a long way to go Zimbabwe might be closed for the next three months. The Soldiers and Police doing patrols have no protective gear also.
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