Delivering his first full budget since becoming Zimbabwes finance minister in February, Biti said the economy was forecast to grow by seven percent next year on the back of an anticipated improvement in manufacturing, mining and agricultural output. He announced that Zimbabwe would cut the corporate tax rate from 30 percent to 25 percent in 2010 in a move meant to stimulate economic activity and act as an incentive to businesses that have avoided paying tax.
The Finance Minister also announced an increase in royalties on precious metals such as gold and platinum from three to 3.5 percent from next year while also reducing the size of mineral exploration concessions from 65,000 hectares to 20,000 hectares. The top rate of personal tax was cut to 35 percent from 37.5 percent while the tax-free threshold was raised slightly to US$160 a month from US$150 previously.
Biti extended the suspension of duties on imported food stuffs for a further six months until July 2010 and reduced the duty on passenger and light commercial motor vehicles to 25 percent from 40 percent. He also announced a massive infrastructure investment to underpin burgeoning economic growth and improve service delivery. Biti said the government would set aside US$52.6 million to refurbish the Zimbabwe Electricity Supply Authoritys power generating and transmitting infrastructure, including US$5.5 million for rural electrification.
Provision of power in rural areas is expected to boost economic growth since the areas are a major contributor of raw material particularly for agro-based industries. Biti said provision of clean, uninterrupted water supplies was also key for economic growth and allocated some US$12.6 million to Zimbabwe National Water Authority to enable it to complete water supply systems to growth points.
Investment in water infrastructure is critical as Zimbabwe moves to avoid a recurrence of last years deadly cholera outbreak which claimed more than 4 200 lives and affected nearly 100 000 people in 10 months.Post published in: Mining