Bill Watch 46/2014 of 15th December

When Parliament resumes on Tuesday 16th December for its last few sittings of the year, the focus will be on the 2015 Budget, following the presentation of the 2015 National Budget Statement by the Minister of Finance and Economic Development on 28th November.

First on the programme for the National Assembly will be the debate on the Minister’s speech; during this debate reports will be presented from the Parliamentary committees that have spent the last week considering the Budget in relation to the Ministries they oversee.

In the lead-up to this week’s sittings a Government Gazette Extraordinary dated 10th December published the two Budget-related Bills expected to be passed by Parliament during the week:

· Appropriation (2015) Bill [H.B. 12, 2014]

· Finance (No. 3) Bill [H.B. 13, 2014].

[Soft copies of both Bills will be posted on the Veritas website www.veritaszim.net as soon as possible; please keep checking. The Estimates of Expenditure for 2015 and the full text of the 2015 Budget Statement are already on the website.]

Appropriation (2015) Bill [H.B. 12, 2014]

The purpose of this Bill is to provide Parliamentary authority for the funding of the “service of Zimbabwe” – the functioning of the legislature, executive, judiciary, constitutional commissions and governmental operations generally – during the financial year 2015. It is necessitated by the Constitution, which lays down the basic constitutional principle that all official revenues – fees, taxes, proceeds of borrowing, etc. – go into the Consolidated Revenue Fund [CRF] and that no money may be withdrawn from the CRF unless the withdrawal has been authorised by the Constitution itself or by an Act of Parliament. As only a small proportion of annual expenditure is authorised by permanent or “standing appropriations” in the Constitution and certain Acts of Parliament, the greater part of the expenditure needed to run the country must be authorised by an annual Appropriation Act.

The Bill for the annual Appropriation Act can only be introduced into the National Assembly after the Assembly has approved the Estimates of Expenditure to which the Bill will give effect. Hence the present Bill, designed to give effect to the Estimates of Expenditure for 2015 tabled by the Minister of Finance and Economic Development at the end of his Budget presentation on 28th November and scheduled to be considered by the National Assembly after the conclusion of the debate on the Minister’s speech, due to start on 16th December.

The Bill follows the customary form for an Appropriation Bill, with a Schedule summarising the expenditure proposed to be met from the Consolidated Revenue Fund during 2015.

The Schedule shows not only the individual votes for the President’s Office, Parliament, each Ministry, and the Judicial Service Commission and Public Service Commission, but also the sub-votes that make up each of these votes. This means that it is possible to see at a glance the separate overall amounts allocated to the various entities for which a Ministry is responsible. For instance:

· under Vote 19 for the Ministry of Justice, Legal and Parliamentary Affairs, the amounts to be voted for each of the following entities are listed – Zimbabwe Prisons and Correctional Services; Attorney-General’s Office; Zimbabwe Electoral Commission; Human Rights Commission; National Prosecuting Authority. The Judicial Service Commission has its own vote, Vote 27.

· under Vote 4 for the Ministry of Defence, there are separate sub-votes for the Army and the Air Force

· the proposed funding for the independent constitutional commissions and other entities for which the Constitution[section 305(3)] requires separate estimates, is shown by appropriate sub-votes under the Ministries concerned: the Anti-Corruption Commission under Home Affairs; the Electoral Commission and the Human Rights Commission under Justice, Legal and Parliamentary Affairs; the Media Commission under Information, Media and Broadcasting Services; the Gender Commission under Women’s Affairs, Gender and Community Development; and the Land Commission under Lands and Rural Resettlement; and the Council of Chiefs under Local Government, Public Works and National Housing.

Greater detail on the purposes for which expenditure may be incurred under these votes and sub-votes is to be found in the Estimates of Expenditure for 2015 [soft copy of Estimates available from the addresses given at the end of this bulletin]. This greater detail will have statutory force when the Bill becomes law, because clause 4 of the Bill provides that “the moneys appropriated shall be applied to the services detailed in the Schedule and more particularly specified in the Estimates of Expenditure” [i.e., to use the words of the definition in clause 2, “the Estimates of Expenditure for the year ending on the 31st December 2015, submitted to and approved by the National Assembly”].

Finance (No. 3) Bill [H.B. 13, 2014]

This Bill will also be introduced during the week, assuming that the National Assembly approves the Minister’s Budget presentation. It is important to note that the gazetted version of the Bill differs considerably from the Departmental Draft made available by the Ministry of Finance and Economic Development after the Budget presentation – it has 31 clauses compared to the Departmental Draft’s 17. There is also a helpful explanatory memorandum.

Income tax Part II of the Bill deals with income tax matters. Provisions include changes to the tax bands with effect from 1st January 2015, with zero tax payable on taxable income of $3 600 per annum [$300 per month] or less, and a top rate of $50 per cent payable on taxable income of more than $240 000 per annum [$20 000 per month].

Royalties on diamonds Clauses 23 and 24 exclude from liability for this royalty those diamonds that are sold to any local diamond manufacturer.

Tax amnesty Clauses 25 and 26 make the following changes to the recently-introduced Part VII of the Finance (No. 2) Act, 2014 providing for a tax amnesty:

· the deadline for payment of tax where amnesty is granted, is extended to 31st December 2015 [from 31st March] but it is important to note that the deadline for amnesty applications remains unchanged at 31st March 2015;

· the Minister is given power to make regulations allowing a discount for early payment of taxes covered by the amnesty.

Amendment of Indigenisation and Economic Empowerment Act In a potentially major change to this Act clause 27 of the Bill devolves to “line Ministers” the responsibility for approving indigenisation plans, undertaking indigenisation and empowerment assessment ratings and certifying transactions as being compliant with the Act. “Line Minister” means the Minister responsible for the sector of the economy to which a business subject to the Act belongs.

Amendments to Reserve Bank Act Clause 28 amends the Sovereign Wealth Fund of Zimbabwe Act to correct an error in the long title and to bring into force immediately amendments made by that Act to the Reserve Bank of Zimbabwe Act.

Infrastructural Development Bank of Zimbabwe Clause 30 amends the Banking Act to make the IDBZ subject to the same prudential requirements as other banks.

State pensions Clause 31 validates certain increases in State pensions which should have been, but were not, in the statutory instruments providing for pension increases in terms of the Pension Review Act.

Government Gazette: 29th November to 12th December

Budget Bills [see also above]

Appropriation (2015) Bill [H.B. 12, 2014]

Finance (No. 3) Bill [H.B. 13, 2014].

Statutory Instruments

Excise duty on cigarettes and other tobacco products SI 169/2014, gazetted on 29th November and effective from 1st December, increased the excise duty on cigarettes, cigars, etc. from $15 to $20 per one thousand sticks, as proposed by the Minister of Finance and Economic Development in the Budget Statement delivered two days previously.

Gokwe South Rural District Council area – subtraction of Chirisa Game Park SI 170/2014, gazetted on 5th December, is Presidential Proclamation 3/2014, which removed Chirisa Game Park from the area under the jurisdiction of the Gokwe South RDC.

General Notices

National Prosecuting Authority Board members GN 550/2014 gazetted the membership of the NPA Board [more on this will appear in our next Bill Watch bulletin].

Government financial statements for September were gazetted under GN 554/2014 of 12th December.