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SENATE HANSARD 25 SEPTEMBER 2024 VOL 33 NO 80
PARLIAMENT OF ZIMBABWE
Wednesday, 25th September, 2024.
The Senate met at Half-past Two o’clock p.m.
PRAYERS
(THE HON. DEPUTY PRESIDENT OF SENATE in the Chair)
ANNOUNCEMENT BY THE HON. DEPUTY PRESIDENT OF SENATE
SWITCHING OFF OF CELLPHONES
THE HON. DEPUTY PRESIDENT OF SENATE: I would like to remind the Hon. Senators to put their devices on silent or better switch them off.
MOTION
LEAVE TO MOVE SUSPENSION OF STANDING ORDERS NUMBER. 32 (6), 52 (1), 65 (2) AND 137
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENTAND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Hon. President of Senate, I seek leave of
the Senate to move that provisions of Standing Orders, Number 32 (6), 52 (1), 65 (2) and 137 regarding the reporting period of the Parliamentary Legal Committee, the automatic adjournment of the House at Five Minutes to Seven o’clock pm on sitting days other than a Friday and at Twenty Five Minutes past One o’clock p.m. on a Friday, Private Members’ Motions taking precedence on Thursdays after Question Time and Stages of Bills respectively, be suspended with effect from today, for the next series of sittings, in respect of Government business.
Motion put and agreed to.
MOTION
SUSPENSION OF STANDING ORDERS NUMBER 32 (6), 52 (1), 65 (2) AND 137.
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Thank you Hon. President of Senate. I rise to move that provisions of Standing Orders Nos. 32 (6), 52 (1), 65 (2) and 137, regarding the reporting period of the Parliamentary Legal Committee, the automatic adjournment of the House at Five Minutes to Seven o’clock pm on sitting days other than a Friday and at Twenty Five Minutes past One o’clock p.m. on a Friday, Private Members’ Motions taking precedence on Thursdays after Question Time and Stages of Bills respectively, be suspended with effect from today, for the next series of sittings, in respect of Government business. The reason is to allow Senate to conduct business on the Finance Bill passed by the National Assembly last week.
Motion put and agreed to.
SECOND READING
FINANCE (2024) BILL [H.B. 8A, 2024]
Second Order read: Second Reading: Finance (2024) Bill [H. B. 8A, 2024].
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION: (HON. D. K. MNANGAGWA): Hon. President, the Bill seeks to give effect to the revenue tax measures that were presented by the Hon. Minister of Finance on the 2024 Mid Term Budget and Economic Review Statement on the 25th of July in 2024. These measures seek to enhance tax collections to spot the transformation agenda through reform of policy and administrative practices. Additional measures seek to augment recently introduced monetary policy measures as well as provide relief to tax payers.
In summary, the Bill provides for the following, under Clause 2 which speaks to corporate income tax. It provides for the payment of corporate income tax on a 50:50 basis for corporates whose revenue exceeds 50% in foreign currency and also provides for payments of tax in local currency proportionately where companies’ revenue cannot exceed 50% in local currency. This clause also seeks to regularise corporate income tax payments made during the second quarterly payments rates for 2023 and 2034.
In line with paragraphs 453 to 458 of the Mid Term Budget Review, Clauses 3 and 4 Mr. President, you will be aware since the introduction of the Zimbabwe Gold, the local currency tax free thresholds and tax bands were adjusted through S.I. 74 of 2024. Clauses 3 and 4 thus validate the adjustment and also differentiate the two tax periods as provided under paragraphs 503 and 504 of the Mid Term Budget Review.
Under Clause 5 that speaks to automated financial transactions tax, this clause seeks to regularise the increase in automated financial transactions rates as highlighted in paragraph 509.
Clauses 6, 10 and 12 on presumptive tax, in order to provide relief for tax payers thereby enhancing tax compliance, Government made the necessary adjustments to presumptive tax. These clauses thus seek to revise downwards, the presumptive taxes and also broaden the tax band to include beauty parlours, fitness centres and butcher operators as provided for under paragraph 470.
Clause 10 compels professional bodies to demand tax clearance certificates before renewal of their practicing licences for independent professionals.
Clause 7 on the intermediate monetary transport tax (IMTT) seeks to eliminate preferential treatment on specified transactions, align rates of IMTT on local currency transfers to foreign and out bond transactions as well as the Zimbabwe gold backed digital token.
Clause 8 speaks to the period of assessment on personal income tax. This Clause provides for two periods of assessment for tax purposes as provided for under paragraph 504 of the Mid-Term budget Review.
On Clause 9, the Zimbabwe gold backed digital seeks to provide the definition of Zimbabwe gold backed digital token.
Clause 11 speaks to bonus tax free threshold, Mr. President, this clause removes the reference of the Zimbabwe dollar on the tax-free portion of bonus payment and substitutes a tax-free portion of US$700 on local currency equivalent pursuant to paragraph 5.1.5 of the Mid Term Budget Statement.
Clauses 13 and 14 speak to capital gains tax seek to regularise the introduction of the 2% capital gains withholding tax as final tax for a period of six months as provided for in paragraph 5.1.1 of the Mid Term Budget.
Clause 15 speaks on deferment of value added tax; in order to safeguard the tax base, Government introduced remedial measures to reduce the tax date emanating from non-compliant beneficiaries of the deferment of value added tax facility upon importation of capital equipment. This clause thus provides regularisation of compliance measures. The clause also provides for VAT deferment on projects for gestation periods of two and three years for manufacturing and mining sectors respectively.
Clause 16 speaks to unbeneficiated platinum and provides for suspension of collection of tax on exportation of unbeneficiated platinum for the period of 1 January, 2023 to 31 December, 2024.
Clause 17 speaks to the special surtax on sugar content of beverages. Mr. President, this clause provides for the charging of the special surtax on sugar content of beverages with effect from the 9th February, 2024.
Clause 18 speaks to the confirmation of tariff amended and replaced by the Minister; Mr. President, this clause seeks to confirm the subsidiary legislation that effects to the charging of a special surtax on sugar content of beverages and e-cigarettes implemented through SI 249 of 2023, 16 of 2024 and 139 of 2024.
Clauses 19, 20, 21 and 25 on confirmation of tariffs amended or replaced by the Minister; this clause removes reference to the ZW$ and replaces it with the Zimbabwe currency (Zimbabwe Gold).
Clauses 22, 23 and 24 on issuance of ZiG notes and coins make reference to the issuance of ZiG notes and coins and the conversion of the Zimbabwe dollar balances to ZiG.
Clauses 26 on reserved sectors seeks to amend the indigenisation and economic empowerment by adding more sectors to the existing sectors.
Clause 27 on amendment of the Public Procurement and Disposal of Public Assets Act seeks to give more power to PRAZ to monitor compliance and provide a framework where an exemption can be revoked if public entities do not act responsibly.
Clauses 29 and 30 on the disposal of assets and interests by public offices, these clauses are meant to implement section 198 (a) of the Constitution in order to improve accountability of all public officers with respect to disclosure of the extent and sources of their wealth and their interests in certain businesses. This asset disclosure is vital as it helps Government to fight corruption withing the public sector and promote good governance. In conclusion, I now move that the Bill be read a second time.
*HON. SEN. TONGOGARA: Mr. President, from the Finance Bill which he is explaining the way forward, I wanted to find out about the ZiG and does this Bill in anyway, seek to rectify things because when the ZiG was introduced, people were very happy and used to buy easily in the shops but it is now different? The prices are going up with no good explanation especially in the shops. The shops are the ones that are really causing havoc and if you want to buy using your card you will not get change. They will tell you that we do not give you change as we do not mix US$ and ZiG. So, are you working to rectify this so that people will continue being happy as it was in the beginning at the introduction of the ZiG? This is what I wanted to find out from the Hon. Minister.
HON. SEN. PHULU: I would like to contribute to the discussion as presented by the Minister before this Assembly. I would like to point out a few things which we think that the Bill ought to take into consideration and I will do this broadly as this is the debate and not the Committee Stage. I will try as much as possible to do it very briefly and broadly.
Firstly, as I went through it, I think all it does is simply make amendments in order to be in accord with the Budget Statement that will be presented. A copy of which we have seen and there is nothing that largely transforms the landscape in as far as legislation is concerned and in as far as the Finance Act is concerned. The changes are simply those that are necessary. However, I would like to urge the Hon. Minister to consider that the overall effect of the Bill must not be to impose unnecessary hardship on those sectors of our society that are already facing the toughest stint during this time.
For instance, I have been following this Bill as it perambulated through this Parliament and I do acknowledge, for example, the levy on informal traders who have been distinctly put into different classes. I did see that the hairdressers, for instance, their tax went down quite steeply. I think it has been quite a hefty sum and this shows flexibility on the part of the Minister and demonstrates a listening ear. I do not know if this House will try to press you down any further on that one.
Still, I also noticed some charges for example, that we will examine when we get to the clause by clause; people who own vehicle trucks above a certain tonnage are being charged tax at about 200 per month. I am not sure whether it is per month or annum. Still, the definition is not quite clear as to say that this relates to commercial vehicles.
So, I am thinking of a farmer who owns a very big truck to ferry his cattle to the fair. That farmer has already been taxed for his farming activities broadly. Now that he owns a number of these large vehicles which he does not hire out or use for any commercial purposes other than for purposes of doing his farming for which he already gets taxed, being clustered in the same class as people who own these vehicles precisely for purposes of hiring them out and maybe being in the transport industry, I think the Bill should cater for such instance and make a differentiation. There may be other instances but broadly speaking, I am urging this House to look at this kind of thing because we must ensure that the amendments that we go through are not the ones that are unduly burdening people who are doing different businesses or trying to make a living.
The distinct thing about this Bill is that it goes through Parliament pretty quickly, so it is not subject to the same scrutiny that an ordinary Bill will be subject. Therefore, we must be careful to scan it to see that we do not introduce some sharp turns in people’s lives. Remember, this Bill is going to be applicable as soon as it is passed maybe sometime today or tomorrow and so, we have to be careful about those kinds of things.
We also have to be careful about the timelines in terms of which items are implemented so that they again do not take members of the public by surprise.
I will zero through to the clause in which I have a particular interest without going through the clause in detail but simply to say Clause 31 which is an amendment to the immunities and powers of Parliament Act, Privileges, Immunities, and Powers of Parliament Act, I know that the background to this, is that there is a High Court judgment that requires this to be legislated. Members of Parliament are already subject in terms of the Standing Rules and Orders, to disclose whatever assets they own. The judgment says, to pass a law and respond to the Minister, I suspect it is the Minister of Justice, Legal, and Parliamentary Affairs conniving with the Minister of Finance, Economic Development and Investment Promotion. The response of the Minister is to slip these into this Finance Bill and yet this is an item, which in my view, should have been subject to the ordinary passage of law through Parliament and it should have come through its distinct amendment to that particular piece of law.
As a result, several things arise. Whilst it is welcome that Members of Parliament must disclose, there is no objection to that but how it is done requires scrutiny. For example, there is a need to align the requirement of asset disclosure with constitutional protections of privacy and it is essential to incorporate the following or several safeguards simply as an example.
For example, the value threshold, I noticed that the clause does not have a value threshold. Do I disclose a shovel that I buy? Do I disclose a wheelbarrow? Do I disclose a car or a house to establish a minimum value for the assets that must be disclosed to limit the scope of disclosure to significant properties only would be very useful? This would avoid an overly burdensome requirement to disclose trivial assets.
On Clause 31, frequency of disclosure, I think we need to set reasonable intervals for updates because there is a requirement for updates but the clause does not tell us, maybe it leaves the discretion to Parliament but certainly, reasonable intervals for asset-to-asset disclosure rather than requiring continuous and overly frequent updates. This would minimise administrative burdens and inspect the private interest of Members of Parliament as well. It would not compromise the principle that they should disclose their assets. You cannot be doing it every week or every month. So, I would recommend to the Hon. Minister that if they could consider that kind of thing.
Public asset and oversight, rather than making all disclosures public, without consideration for confidentiality or restricted access to certain details safeguarding personal privacy while ensuring the transparency of the public office; those are some of the things we will look at in the clauses as we go.
Another clause that we will examine in detail is again about asset disclosure for Government officials in general. While this is welcome as we examine, we hope the Minister will guide us. We hope it also has some thresholds and it targets the real big offices so that not every Government employee, no matter their grade, is subject to this asset disclosure. I think there should be some grades that are targeted, and some significant offices that are targeted, I am not sure whether that has been considered. We will be looking at it as we go into Committee Stage.
So, in a nutshell, I would like to say that we welcome the Bill, we hope that it does not unduly burden the less influential person who is suffering. We hope the Minister is going to be flexible and patient with us as we go through this Bill clause by clause.
I was looking at a definition of a Finance Bill and the addition of those two Clauses 31 and 32, in my submission takes this Bill outside the ambit of a Finance Bill. It is not a Finance Bill if you go by the definition and we have not made a meal out of it but Hon. Minister, we will. Next time we will take up the issue very seriously that you do not smuggle things that have nothing to do with the finances or the consequences of finances into this Bill. Certainly, some of these clauses need a closer inspection, only if I had the time and facility, I would have made noise about this and taken the Minister to court. I hope the Minister will not come to the Senate thinking we will let these things lie. It is a warning shot. I thank you.
HON. SEN. TSHABANGU: Thank you Mr. President. I raise a serious concern and observation on the Bill. It is silent on money transfer which has been really affecting almost everyone because we are moving with technology using these gadgets, we are no longer carrying the ZiG or the United States Dollar – we use smart phones to transfer our money. The tax is quite high and the Bill does not seek to address that.
Coming to presumptive tax Mr. President, there is no cap. We know one thing for certain that the Bill is silent on the cap of this tax and yet it affects the informal sector. Mr. President, we know that Governments milk the informal sector because this is a source of revenue collection, which is easier for any Government and they suffocate the small businesses that are trying to grow through this tax. We have got a wide space in which everyone operates from, which is in the formal sector but this Bill is silent on the tax invasion. It is silent on the non-tax compliance but on the other hand, it is wide open, it milks through revenue mobilisation without really considering the implications that may cripple the small business players in the industry.
My question is; inasmuch as we may want to enforce and ensure that is in place, what do we do about the tax invasion and non-tax compliance because it is really silent on that? That is my submission Mr. President.
HON. SEN. ZINDI: Thank you Mr. President. I do not have much but just one or two issues that I would like to raise with the Deputy Minister of Finance, Economic Development and Investment Promotion in as far as this Finance Bill is concerned.
This is also in relation to what Hon. Senator Tongogara has just raised as well. In view of that, the Bill is silent in terms of how businesses can access, for example foreign currency, particularly when we have just seen that recently there was a very strong statement by the major supermarkets in terms of inadequacy of foreign currency for restocking by these big supermarkets.
Hon. Senator Mbohwa having passed between the Chair and the Hon. Member speaking.
THE HON. PRESIDENT OF SENATE: Order, Order! Hon. Senator Mbohwa, you may go back. Proceed Hon. Senator Zindi.
Hon. Senator Mbohwa exited the Chamber.
HON. SEN. ZINDI: Thank you, Mr. President. Yes, I was just making reference in connection with the inadequacy on access of foreign currency by the major supermarkets and the statement that they wrote and submitted to the Reserve Bank. I am saying the Bill is silent on how businesses can access foreign currency. Their argument being that we have also seen prices going so high within the past two weeks. The argument by these supermarkets is that where they are sourcing goods, they are being asked to pay in hard currency, but the output of that foreign currency is ZiG; they cannot take that ZiG for restocking hence their statement.
This has been a pattern in the whole economy. For instance, even in farming, all your inputs in terms of whatever you want, be it repairs, seeds, fertilisers and fuel – everything is purchased in hard currency. When you go to sell, you sell in ZiG, making it very difficult for one to continue with production. So, I would like to find out how that issue can be addressed. Will we not see ourselves back to 2008 again if this matter is not immediately addressed? I thank you.
*HON. SEN. GOTORA: Thank you Mr. President for giving me this opportunity to contribute to this debate. I also would like to thank the Hon. Minister for tabling the Bill in this House, giving us an opportunity to understand and be able to help each other on the best way to support the economy. I have a few questions to the Hon. Minister, the first question being, how is this Bill helping us to control unnecessary luxury imports that end up chewing whatever little currency that is in the country because the majority of the imports are by foreign currency, which is the USD?
The second is, how is the Bill going to help with transactional costs, whether it be POS machines, ATMs or bank charges as we transact? The next thing that I would want to find out is, how is the Bill going to enforce the payment of taxes by big businesses in ZiG so that it increases the demand of the ZiG locally and also strengthens the value of our local currency?
How is this Bill supporting the FIU …
THE HON. DEPUTY PRESIDENT OF SENATE: Order, order Hon. Sen. Gotora. Hon. Senator Gotora, you should choose one language and stick to that language. You may proceed.
*HON. SEN. GOTORA: Thank you, this is the problem with colonisation. My last question is, how is this Bill strengthening the FIU when they go out to inspect the anomalies in the exchange rate, be it the general dealers, wholesalers or individuals? If you were to report to the FIU that a certain wholesale is doing this and that and nothing happens. In the end, you accept because no action is taken.
Finally, I want to say Hon. Minister, if we want this Bill to pass according to our expectations, you must be able to give us information that we will be able to give to the public out there; explaining clearly what exactly you want to bring out. I thank you.
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Thank you Mr. President, let us start by addressing the issue that came from Hon. Sen. Tongogara amplified by Hon. Sen. Zindi, which speaks to the excitement that was there when ZiG was launched, the value that it had and the subsequent, I will say confusion that is now there. Mr. President, I will speak to what I would call flawed social contract between Government and business.
Before I explain what I mean by that, I would like to give comfort to this Senate and Zimbabweans in general that all the reserve money that is there is fully backed by gold, cash and other assets. The question that is now there and that the Governor who is responsible for monetary issues said, once you exhausted your cash, to intervene should you then liquidate the gold or do we continue to keep our gold as national reserve? The initial social contract between Government and business as was articulated by the Governor in this Senate and to the nation because if an importer comes with a genuine and bonafide receipt, he would get foreign currency allocation. This was the promise of the Governor and business bought into it because we were all excited about the ZiG. Where the flaw then comes in the social contract, it is unfortunate that we need to point to speculate as an agent is that one comes with the bonafide invoice to import something may be worth US100 000 and there are remaining US dollars balance in their bank account. The Governor, but you have remaining US dollars in your account, the retailer or the manufacturer will then say, you said if I come with a receipt, you will give me the foreign currency allocation. Meanwhile, there is another importer who has no US dollars and needs that US100 000. This Hon. President has created a situation that puts pressure on the foreign currency.
I would think that what we are experiencing is something that would have been refined for the fine-tooth comb at the very beginning as far as the reserves that back that currency, these are adequate and it is just the functioning of the market that needs to be refined. With that, the question that came from the Hon. Senator is how this Bill is addressing some of these challenges. Mr. President, if you recall we had made a request or proposal that 50% of corporate income tax be paid in ZiG. This is not yet law and hence forth, it has just been happening administratively on an ad hoc basis at all basis without being able to compel companies to pay in ZiG. This removes the impetuous that Government has to create more demand. How this Bill addresses this is that even for companies trading at 100% US dollars, they are now forced to pay for their quarterly payment dues in ZiG. This will entail increased demand for our local currency. This is how the Bill augments that and further to that you will find that the Bill speaks to all payments to Government departments in ZiG, whether you go to the Ministry of Mines and you are a small scale miner who earns 100% of your earnings in gold at the time for renewing your certificates or inspection of these, you will have to pay in ZiG. This is how the Government is trying to ensure that indeed, there is demand and were the first mover for that.
All these Hon. President, are not yet law. These are proposals and they must be implemented, henceforth the Government demand that Government seeks to create for its currency, it has not yet been legalised. Further to that to give the Hon. Senator comfort Hon. President, we are at dialogue table with business and industry to make sure that all the areas and the gaps that have been overlooked are addressed so that we do not see some of these increases that we see. It is not a matter of blame apportionment where there is capability, I think we are admitting on board between Government and business, but it is an issue that will be resolved and is being resolved.
We are at comfort that Government and business are working to make sure that our currency works. Moving on to Hon. Sen. Phulu submissions, his first one was that this Bill only seeks to align the current law and it is not transformative.
Mr. President, I would like to remind this august Senate that this is a Mid-Term Review. What we are reviewing is the 2023 Budget that was presented last year. We are tracking the progress and where it means doing so within two months and the same will be sitting to discuss the 2025 budget, which is where I would hope we can have extensive discussions on a lot of these issues Hon. President. Usually mid-year or third quarter, we want to track progress or full cycle before we can determine whether to make changes, to repeal or to further improve.
Hon. President, what we are here for is to review of the first six months of 2024 to see how all the policies that were passed in 2024 budget that was set in 2023 is doing, not to quickly present a new budget; we are just going through review.
The Hon. Senator asked us not to impose hardships on the generality of Zimbabweans and indeed, if you notice that most of the submissions actually gave relief to small businesses and to people, I think it was even removal on VAT, poultry and on livestock, if anything, this review was downwards. I cannot pick a single tax that was reviewed upwards. Instead everything was reviewed downwards; it was reviewed laterally meaning from US dollar to ZiG, that is what this review is doing. Pretty much reviewing a lot of the taxes downwards and allowing our citizenry to transact in ZiG more.
The Hon. Sen. did acknowledge that these taxes are going down, hairdressers are now down to USD 5. Indeed Mr. President what we have is a tax system that was not designed for the small business. It means that our presumptive taxes have to be innovated.
Sometimes it is not even just about the quantum. So, apart from finding the right balance or right quantum that will allow small businesses to survive, we also want to make it easier for the small businesses to pay their taxes. Some businesses are not paying taxes, not out of the simple need to evade tax but because they do not know how to pay tax.
So, these are some of the issues that we were trying to make sure that there is financial inclusivity of everybody. We also are trying to make tax more reachable to the small business person and there will be a few administrative announcements in the next few months on how a small business person who has never been to ZIMRA office can pay taxes. These are issues that we are looking at to make our taxes a bit more accessible for those who are patriotic not to pay the taxes.
Now, Mr. President, the Senators spoke to some of the taxes that are being charged on trucks that there is no discrepancies between a commercial truck that may belong to a farmer and one that belongs to a logistics company that is carrying platinum or lithium, henceforth is able to afford such. I would have to relook at that schedule. I know my team is here, if there is any adjustment, it is something that we can make but indeed, we do not want to increase the burden especially on our farmers. So, this is something that we will look at.
The Senators spoke to Clause 31 and indeed, that is why I am here with the Minister of Justice in case there are issues that may come up on what he believes to be issues that have been sneaked and I am glad that he will not take us to court for this. However, Mr. President, the fight on corruption is one that will be borne by everybody, whether it is through the Minister of Justice or the exchequer himself, I believe we all are of locus standi to fight in corruption.
When it comes to disclosures especially for public officials, the Hon. Senator made a few submissions which I wish to clarify and maybe open to further debate, mentioned that there is no threshold on disclosure, for example a shovel, should they want to be disclosing a shovel. I would think depending on the different stations that you are in, a shovel can indeed be a proceed of corruption, henceforth depending on where you are, you should have a full disclosure of your assets.
He also mentioned the frequency of disclosure. I would think that frequent disclosure indeed might become a bit tedious but the whole point of disclosure is to protect both the citizenry and the Government officials themselves. If you as a Member of Parliament have a thriving business and certainly you have found yourself into some new riches, it will be in your best interest to immediately disclose, lest you be blamed for being corrupt. So, I will say that everyone knows their personal circumstances. If you have come into some inheritance for example, it is very easy for one to blame you for corruption. Henceforth, the regular need to be transparent as a public official and make sure that the State knows what you have, if it is increasing, that increase is kept alive to everybody.
Asset disclosure for Government officials Mr. President, the Hon. Senator bemoans that it is only the top officials who should disclose. I would think that the infrastructure that we have where corruption is almost institutionalised, we need to make sure that everybody is accountable, henceforth disclosure at every level should be necessary. Mr. President, we understand the issue of proportionality if you have a whole base of junior officials in their thousands who are corrupt, even in small amounts, that also adds the fiscus. So, in this fight against corruption, the need to have asset disclosures is necessary that as long as you are a public official you are held accountable.
Now, Mr. President, I am not sure if my colleague Minister would want to assist on this particular debate because we have been accused that it belongs to him even though we think it belongs to us, that is why we presented it. I am not sure if you will allow him to do so.
THE HON. DEPUTY PRESIDENT OF SENATE: Yes, I would allow if he wishes.
THE MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. Z. ZIYAMBI): Thank you Mr. President. I want to thank the Hon. Minister for a very elaborate response to the debate and add that contrary to what Hon. Phulu is saying that these have been smuggled in, I think they belong to the Ministry of Finance but we can argue that this is a cross-cutting issue. Being a financial issue, yes, it is because it hurts the fiscus if people do not disclose and you are unable to tell how they acquired their wealth. It is something that is indirectly or I would want to put it this way that it is directly related to what we collect and how it is spent. Why am I saying so? I am saying so because if we put this clause in this Bill, it becomes also a deterrent measure to those that know that now that I am obligated to disclose my wealth, I would be accountable for whatever I have in future and I have to explain where I got that.
So, it is also a kind of deterrence and it will enhance our accountability in terms of the resources that we have. I believe it is not a very harmful clause to Hon. Members and I am very glad that I said no, I am not pursuing it cognisant of the fact that he knows it is a very important clause in-so-far as the issue of disclosure of assets and all of us being held accountable. I subscribe to what the Hon. Minister of Finance has said that it does not matter the level that you are at. I think it is good for the individual. Once you disclose, you know you are protected. If somebody asks about your wealth, you can always say I disclose this and that is what I had when I got in and this is what I have. I submit and refer back to the Minister to continue with the debate. I thank you.
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT, AND INVESTMENT PROMOTION (HON. K.D. MNANGAGWA): Thank you, Mr. President. I now move on to the submission by Hon. Sen. Tshabangu. He spoke about how the Bill is silent on the Intermediated Money Transfer Tax (IMTT) and that the tax is quite high and the Bill does not do anything to address that. He also speaks to the Bill being silent on tax evasion and non-tax compliance.
Mr. President, you will find that these two observations end up becoming conflicting. The intended purpose of the IMTT when it was established, was to be all-encompassing as a cure to tax evasion and non-compliance because you would find that your informal sector citizenry was not subscribing to the payment of taxes, henceforth the Minister came up with the IMTT as a tax that would umbrella and cover everybody.
However, I do agree with the Senator that as we are progressing in the digital age and advocating for a digital economy, the transaction costs become a bit high, especially when you compound with your bank charges. I would like to assure the Hon. Senator that these are issues we are introspecting upon. We desire to have a free-market economy and we have continued to spread the message that we will not interfere or introduce price controls.
However, the reason why the IMTT discussion is lagging behind Mr. President, is that it cannot be a solution in isolation. We want to tackle the cost of online transactions in totality but not at the prejudice of the Government. So, these are discussions that will be happening for a certain period. At certain times, we had to put banks on notice of their bank charges. They are still on notice and we are hoping as responsible and patriotic institutions, they will listen to the call of the legislators of the people that their charges are too high before the Government intervenes.
So, Mr. President, the discussion on IMTT transaction costs needs to be handled in totality. We want low-cost online and digital transacting, especially for our young people as this is their main means of transacting. So, I will say that indeed this Bill is silent on that but this is a review of the 2023 Budget Statement and grander discussions will happen as we prepare for the next budget if the Senate and the National Assembly will allow us to review the Budget that is already past and have a new discussion on that as we start new budget discussions.
Now moving on to submissions by Hon. Sen. Gotora on how this Bill is moving to curb luxurious imports. I will say that this Bill is not the alfa and omega of the efforts and work that is being done by the Ministry of Finance, Economic Development and Investment Promotion. We hope that the monetary authorities are making sure that these bona fide import receipts are being submitted, therefore essential to keep the engine of the economy running.
However, for those who are importing luxurious goods with their free funds, it is their prerogative. If you have your foreign currency and you wish to have a luxury import, I would think that it is within your pocket, how you manage it. So, on that one, we will not interfere but as the Government, we will not be in the business of allocating or being the conduit for luxurious imports.
Mr. President, the Senator goes on to bemoan how this Bill does not address transaction charges, a sentiment that has been raised by previous Hon. Senator Tshabangu. Again, I have spoken to that. The Senator goes on to ask how this Bill is going to enforce the payment of taxes in ZiG. The main component in this Bill is actually to augment ZiG payment. You will find that we have proposed that 50% of corporate tax be paid in ZiG, all presumptive taxes are being paid in ZiG and all payments to Government departments are being paid in ZiG.
So, this Bill does indeed enforce payment of taxes in ZiG. The Government wants to make sure that they are the first mover to demand their currency. As soon as this Bill goes into law, you will find that these will become operationalised and that demand will increase.
Mr. President, the Hon. Senator goes on to ask how this Bill is going to capacitate the FIU and their operations while they are traversing the nation. We have already capacitated the Finance Intelligence Unit (FIU) and continue to do that. Outside this Bill, we have taken that as an administrative and operational issue and FIU has been fully capacitated to their needs to make sure that they carry out their intelligence and enforcement activities.
With those responses, I now move that the Finance (2024) Bill [H. B. 8A, 2024] be now read a second time.
Motion put and agreed to.
Bill read a second time.
Committee Stage: With leave, forthwith.
COMMITTEE STAGE
FINANCE (2024) BILL [H. B. 8A, 2024]
House in Committee.
Clauses 1 to 5 put and agreed to.
On Clause 6:
HON. SEN. PHULU: I have a debate Madam Chair. Clause 6, paragraph 22 (c). I do not know, maybe this may be due to lack of understanding on my part. On page 6 where it refers to small scale miners – the Presumptive Tax chargeable, that is 22 (c) (1) paragraph (b), is calculated at the rate of zero per centum. I do not know, maybe to those who know, I was just asking, what does that mean? Is it zero point anything or it is just zero per centum there?
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Thank you Madam Chair. I think the Hon. Senator picked up on something that we were debating on with my technical team that indeed, when you tax someone zero percent, is it worthwhile to even include them or not include them? It appears to be one of a technical matter in as far as the flaws between the Finance Act and Income Tax Act and the VAT Act. We plead that we just leave it as it is, just so that we do not disrupt the small-scale miners’ activities by any oversight of this Committee because it is indeed an industry that we want to make sure that we safeguard as it continues to deliver the gold that backs our currency. I would think that we leave it as it is, no amendment on that statement.
HON. SEN. PHULU: I think that as long as it is clear, it means they are not taxed for now, but I am sure the Hon. Minister is reserving a right at a further time to simply then change the figure.
HON. D. K. MNANGAGWA: That is correct, they are not taxed any Presumptive Taxes and indeed the tax exchequer yes, does reserve the right to tax at some point if need be. So, I would think that we can leave it as it is. Thank you.
HON. SEN. PHULU: I still have another debate on the same clause once we are done with this one.
THE TEMPORARY CHAIRPERSON (HON. SEN. A. DUBE): You may proceed Hon. Senator.
HON. SEN. PHULU: Paragraph (h), relates to the operators of goods vehicles having a carriage capacity of more than 10 tonnes but less than 20 tonnes, $200.00, that is paragraph (1). (2) vehicles of 10 tonnes or less which are driving one or more trailers, it goes on but it says operators of goods vehicles – I do not know, do we have a definition of goods vehicles? This is where I said a farmer might own a two-tonne vehicle, which is not a goods vehicle but for his own operational purposes really, in various other places or he may end up being taxed twice. So, this is a policy issue that I want to put to the Hon. Minister to consider having a definition of what kind of goods. Every person owning such a vehicle could be levied a hefty amount indeed, of $200.00 a month. It will become expensive to have equipment on one’s farm or personal equipment for moving your domestic issues like when you want to carry your own water and so forth.
HON. D. K. MNANGAGWA: Madam Chair, if I can ask the Hon. Senator to clarify what he is saying, whether to exempt families or farms used as an example in the case of commercial vehicles.
Hon. Phulu having stood up to ask a question.
THE TEMPORARY CHAIRPERSON: Order, wait Hon. Senator, let him finish then I will recognise you. Have you finished Hon. Minister?
HON. D. K. MNANGAGWA: Yes, Hon. Chair, am not sure if he got context of my point of clarification.
HON. SEN. PHULU: Yes, I did get that context. The farmers were nearly an example. What is lost is the definitions of goods vehicle. Is it simply having a vehicle, that carnage makes it a goods vehicle subject to death without looking at the purposes for which I have the vehicle? It might be a hospital having a vehicle of more than 10 tonnes, and should therefore be subject to a tax of USD200 per month. So, the definition is necessary, we need to limit the scope for purposes of tax of the meaning of goods, to really zero-in on the group of people that the Minister intends to target.
HON. D. K. MNANGAGWA: Yes, Madam Chair, I am just checking the definition of goods vehicle on the Income Tax Act, and will answer shortly.
THE TEMPORARY CHAIRPERSON: Is there any objection?
HON. PHULU: There is an objection Madam Chair because the Minister is still checking on the definition, he is not done yet.
THE TEMPORARY CHAIRPERSON: Take your seat Hon. Senator.
HON. D. K. MNANGAGWA: Madam Chair, I am being advised that for one to be an operator of a goods vehicle, it must be registered under the Road Motor Transport Act, which would then allow it to become a commercial vehicle and this is where the definition will draw from. Those who will be operating for farms or for residential purposes would not be registered under such an Act and henceforth would not follow under Presumptive Act. Indeed, the definition is catered for on that Madam Chair.
HON. SEN. PHULU: Should we not therefore say the operators of commercial vehicles, what is defined in the Act is commercial vehicles not goods vehicles according to my understanding. Unless the position is that goods vehicles is defined in the Act then I am fine. I stand guided, I have no objection.
HON. D. K. MNANGAGWA: Thank you Madam Chair. I think the whole idea of having a distinction between goods vehicles, omnibuses, tax cabs, is to apply to driving schools, these are all commercial vehicles but they have been split out so that they can carry their own presumptive taxes. This definition will flow down into what exactly they are. So, we would not want to bunch all commercial vehicles into one presumptive tax because they operate in different businesses. I will stand by the definition that flows to the Road Motor Transport Act for goods vehicles to make it neater.
HON. SEN. TSHABANGU: On the same clause (f), operator of omnibuses for carriage of passengers for hire or what, having sitting accommodation not less than 25 or more than 36 passengers, USD8 dollars per month for each, such will be omnibus operators. This is where I am coming from. The bulk of our transport operators, 70% of them are not registered. It is a fact they are not registered and this Bill seeks to focus on the 30%. You tax the 30%, there is no growth in them but the majority out there are operating outside the law. If they are impounded by the police, they pay the fees but at what stage do they pay this tax? They will go back to the road. I think we need therefore to say what are the costs of registration, at what level should we really tap and increase our tax band? We need to register and have what I can say an easy processing - the registration process so that it becomes attractive and that you are able to tap on them.
Here, you are punishing the small pot that is there and you leave these people who are operating illegally and they benefit. They will benefit and they will never pay this tax that we are talking about. They will be impounded; they will go back on the road and they will pay the bribe and they go on the road and operate whilst those few who are registered feel this pain. You want to punish and milk those who want to comply?
HON. K.D. MNANGAGWA: Madam President, the purpose of this Mid-Term Review Statement was to reduce some of these presumptive taxes to a point where it actually becomes cheaper for you to pay your taxes and go through the hassle of getting arrested, bribing the police officer and a whole lot of people. We are trying to be as inclusive as possible by finding that right confluence point. Indeed, if we are to legislate or make laws sorely for the basis of those performing illegalities, then it will defy the purpose of making the laws to begin with.
So, having these pieces of legislation in place and seeing those who fall out, will allow us to then call upon the different arms of Government to bring them within the ambit of compliance but we still need to have these pieces of legislation in place so that there can be errant operators out there who fall out of the legislation. I would ask Madam President, that while we see how we can formalise and better enforce these operators, whether for omnibuses or goods, we have the pieces of legislation in place so that when it is enforced and they are caught, we know how much they are supposed to pay to begin with, which again, right now, is at a level where it makes more sense to pay than to bribe. I thank you.
HON. SEN. PHULU: Clause 6 becomes a case of double taxation. It is double taxation in the sense that having looked at the definition of goods vehicles in the Road Transportation Act, a goods vehicle is not defined as a commercial vehicle. In other words, the Road Motor Transportation Act taxes people who own a vehicle of this definition when they pay their road tax and get their licence. This Act proposes to tax them again for merely having a vehicle of that make, not because they are operating it in a certain way. Therefore, it is objectionable unless that definition is fixed. I submit.
HON. K.D. MNANGAGWA: Madam President, maybe let me distinguish for the Hon. Senator the difference between regulatory fees and presumptive tax. The whole premise of paying tax is when you run a business, you make money and when you make a profit that is less your expenses, you are supposed to pay a certain percentage of that to the State. This is the income tax. We realise that there are some businesses that have difficult accounting practices and probably non-existent books. That is why when we talk of our small businesses, hairdressers and other businesses where accounting practices might lack, we put a presumptive tax. What we do is, on average we calculate what that profit would have been and what would have been owed to the State and presume that they should be paying a certain amount.
So, what we are doing is not assigning a new fee, but allowing the informal to pay the taxes that are due without having to go through a tedious accounting process. This is the whole principle behind presumptive tax. So, there is no presumptive tax if one goes to the Roads Department or pays a tollgate fee, it is separate from what the presumptive is, which ideally is what you were supposed to be paying for income tax. This is what we are dealing with in this schedule.
If the omnibuses and goods vehicles decide that we are a logistics company, we have got so many of these on the road and have an accountant, then they are not subject to the presumptive tax. They are running their books in the ordinary way and pay for ordinary corporate income tax. So, let us try and distinguish between the presumptive taxes and the general corporate income tax and regulatory fees that are due to other departments. I thank you.
Clause 6 put and agreed to.
Clauses 7 to 9 put and agreed to.
On Clause 10:
HON. SEN. ZVIDZAI: I am looking at section (f) pertaining to the registration of health practitioners. I noticed that even a person who qualifies as a nurse at the university or nursing school desires to be registered. Does this require a certificate as well for such a person to be registered?
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. K.D. MNANGAGWA): Again, let me clarify between big and small businesses. If you are registered under the Health Act and you are running your own practice and you are charging patients for a fee, then indeed, you are liable to pay tax and you should have a tax clearance certificate. If you are running any business, big or small, you need to pay your taxes. Big businesses are paying their corporate income taxes. Small businesses have been provided for under the various clauses for the presumptive taxes. I hope that answers your question Hon. Senator.
Clause 10 put and agreed.
Clauses 11 to 16 put and agreed to.
On new Clause 17:
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. K.D. MNANGAGWA): I propose an amendment to the Senate to be recommended to the National Assembly for a new clause to be inserted in Part IV after Clause 16 and renumber subsequent clauses accordingly as follows;
“17 Substitution of section 81A of Cap. 23:12
The Value-Added Act [Chapter 23:12] is amended by the repeal of section 81A and the substitution of¾
“81A Measures to protect value chain integrity and transparency, and to counter unfair competition by informal traders
(1) In this section—
“manufacturer” means a person who transforms raw materials, intermediate products and any other input using various tools, equipment, processes and services to produce finished products or inputs for further processing.
“non-compliant manufacturer, wholesaler or person or person”, as the context requires, means a person who is not a registered operator or any registered operator who fails to provide proof of such registration and a valid tax clearance certificate.
“retail trade” means the sale of any commodity in small quantities for consumption or use by the purchaser and the expressions “retail transaction”, “retailer” and “retail dealer” shall be construed accordingly;
“retailer” means any person engaged in the retail trade;
“wholesaler” means any person engaged in the wholesale trade, that is to say, the sale of any commodities in large quantities or in bulk to a purchaser who intends to make a profit on the resale of the commodities or to consume them.
(2) Subject to this section, no person other than a manufacturer, wholesaler or retailer who is a registered operator, and who produces proof of registration as such, together with a valid tax clearance certificate, may purchase goods from a manufacturer.
(3) Subject to this section, a manufacturer shall be required to withhold an amount equal to 5% of the value of each purchase of goods by a non-compliant manufacturer, wholesaler or retailer or person and shall remit each amount so withheld to the Commissioner in such manner as the Commissioner may specify.
(4) Subject to this section, a wholesaler shall be required to withhold an amount equal to 5% of the value of each purchase of goods by a non-compliant retailer, and shall remit each amount so withheld to the Commissioner in such manner as the Commissioner may specify.
(5) Notwithstanding subsections (3), (4) and (5), no amount shall be withheld on the supply of the following:
(a) Milk and bread;
(b) Building materials;
(c) Newspapers;
(d) Airtime and mobile data;
(e) Textbooks, stationery, furniture, food, detergents and other essentials to schools registered under Ministry responsible for Education;
(f) Medical essentials and equipment to hospitals and clinics registered under the Ministry responsible for Health.
(g) Any supplies to Government ministries and departments (excluding Statutory Corporations and State Enterprises)
(6) Any manufacturer or wholesaler who fails to comply with requirements of this section shall be subject to a penalty of 200% of the amount to be withheld and interest equivalent to the Bank Policy Rate plus 5%.
(7) The Commissioner may, if satisfied that a failure to withhold or to pay any amount required to be withheld was not due to an intent to evade this section, waive the payment of the whole or part of such penalty or such interest.
(8) The Minister may, by regulations made under section 78, prescribe anything which it is necessary, desirable or expedient to prescribe for the purposes of this section.”.
HON. SEN. PHULU: Madam Chair, the amendment has been put verbally so it is very difficult to analyse it but given the definition of a manufacturer and given the fact that no persons other than retailers may buy from the manufacturer or a wholesaler, it restricts business in such a way that informal traders who make buckets would have to go through a retailer to sell their wares since they fall within the definition of a manufacturer.
Madam Chair, I think that amendment is quite stern and needs to be analysed. I would love to see it in writing first before we can recommend it because it changes the landscape of the nation immediately. It means the person who makes brooms may not sell his brooms to customers in the townships because they are the manufacturer. We will be changing the whole nation into manufacturers.
The policy of the Government is to say, if those who cannot get jobs, make your jobs, create your jobs. A lot of young people are being trained to make their wares and sell them. Here we are putting a law that they may only sell to retailers. So, we are limiting and turning them into specialists of nkonxas then you have to wait for retailers to come and buy. It is going to kill everybody and I object to the amendment.
HON. SEN. ZINDI: Thank you, Madam Chair. I also need to add to what Hon. Sen. Phulu has just raised as a concern. I have personally experienced it or rather found it very difficult with this policy that manufacturers ought to sell through retail or wholesale.
As a dairy farmer, I need to buy what they call pollards and before, we were accessing pollards straight from the maize millers in particular. I want to be very practical because it is something that I have experienced. The mega market is a large producer of mealie meal and we used to get it at a wholesale price from them but since the coming in of the Finance Bill last year, it has made our lives as dairy farmers very difficult that we can no longer purchase directly from the mega market.
We are being told to go through retailers and there are no established retailers for pollards. It is also creating some kind of corruption where you have to pay some workers or somehow in order to access these pollards which are an essential ingredient in the formulation of dairy feed. I thank you.
HON. SEN. ZVIDZAI: It is a point of clarification that I am seeking. Perhaps as my colleague has said, we would have understood it better if it was in writing, but the Minister is saying the withholding percentage would be 5%. We are saying the presumptive value-added tax is being generated at the point of sale because the next person is not compliant. So, we are withholding 5% where the person should have paid 15%. Are we not encouraging people to be noncompliant because they are paying less than if they were compliant?
HON. K.D MNANGAGWA: Maybe let me start with Hon. Sen. Phulu’s question about where he would define our young entrepreneurs, sole traders who are making their wares such as brooms, buckets or toy cars as manufacturers which again is not the intention or how this is defined.
Madam Chair, this definition is linked to the VAT rating and small fabricators are not registered operators, so this would not arise in that instance. I think it would be quite clear who and what the manufacturer is and there would be no confusion about getting into our small business people, our small fabricators. It is well defined within the different statutes.
THE TEMPORARY CHAIRPERSON: Hon. Senators, may you switch off your cell phones – [HON. MEMBERS: It is coming from up.] –
HON. D. K. MNANGAGWA: So, Madam Chair, there are thresholds for one to be able to register for VAT. Henceforth, if one falls below that threshold, they are unable to register for VAT, henceforth they are not considered a manufacturer and this would not arise. If they fall above the threshold, then indeed they are manufacturers and I am sure they will be paying the tax. I think with that definition, it should be a bit clearer who falls within and without the different brackets.
Hon. Senator Zindi brought about the issue on the route to market. When this was proposed and this being proposed, the principle Madam Chair, is to formalise our economy. The challenges that we are having and where the informal sector is proving to be a bit elusive for us is that they are buying directly from the manufacturers and with very low overheads of not paying taxes, not paying rentals, are then able to sell their goods cheaper at the expense of the more formal retailers and wholesalers. This is meant to be a corrective measure and it brings sanity to our economy which then spills into the last submission by the Hon. Senator, I did not get his name, but the 5% withholding tax is meant to be a penalty to the informal trader not that they forego paying 15% VAT but at the end of it, it becomes more expensive because they will not get any refunds. So, they are losing 5%, no one is losing 15%.
This is how the Value Added Tax system works. You do get your refund at the end of it, the small-scale trader does not get, they lose 5%. So, it is meant to be a disincentive against informalisation. I would submit Madam Chair, that this is the spirit and why these are couched the way they have been. Thank you.
Amendment to Clause 16 put and agreed to.
Clause 16, as amended, put and agreed to.
Clause 17 and 18 put and agreed to.
On New Clause inserted after Clause 18:
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Madam Chair, I move that we insert a new clause after Clause 18. I agree now that the sequences of the clauses are accordant. So, this new Clause 19 will be an amendment of Section 234 [Chapter 23:2] and it will read, “Section 234. Goods in Transit of the Customs and Excise Act [Chapter 23:2] is amended by the insertion of the following subsection after subsection (2) (a); The owner of any fuel being removed in transit shall, at the port of entry of the fuel, provisionally pay the duty and levies thereon as if it is not being removed in transit. Such provisional payment of duties and levies shall be reimbursed to the owner of the fuel upon the fuel being acquitted at the point of exit provided that this subsection does not apply to an owner of any fuel being removed in transit who uplifts the fuel from the National Oil Infrastructure Company of Zimbabwe Private Limited (NOIC) or any successor to that entity or fuel procurement entity prescribed by the Minister by notice in a Gazette at the Masasa, Mabvuku and Feruka Depot of NOIC. This would be the amendment to the inserted clause Madam Chair.
Amendment to new Clause 19 put and agreed to.
New Clause 19, as amended, put and agreed to.
Clause 19, now Clause 20 put and agreed to.
Clause 20, now Clause 21 put and agreed to.
Clause 21, now Clause 22 put and agreed to.
Clause 22, now Clause 23 put and agreed to.
Clause 23, now Clause 24 put and agreed to.
Clause 24, now Clause 25 put and agreed to.
Clause 25, now Clause 26 put and agreed to.
Clause 26, now Clause 27 put and agreed to.
Clause 27, now Clause 28 put and agreed to.
On Clause 28, now Clause 29:
THE MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA: Madam Chair, I have a new Clause I want to insert, but I have lost my numbering –
THE TEMPORARY CHAIRPERSON: Can you approach the Chair Hon. Minister?
HON. D. K. MNANGAGWA: Madam Chair, I would like to substitute Clause 28 which is now Clause 29. So, I would like to delete Clause 28 now Clause 29 and substitute it with the following which will be Section 29, Amendment of [Chapter 22:20], the Sovereign Wealth Fund of Zimbabwe Act [Chapter 22:20], No. 7, 2014 as amended by subsection (a) by the repeal of Section 22 (b) in Section 27 by the deletion of the title and substitution of compliance with host country laws subsection (II) by the repeal of subsection (II). I thank you.
Amendment to Clause 28, now Clause 29 put and agreed to.
Clause 28, now Clause 29, as amended, put and agreed to.
Clause 29, now Clause 30 put and agreed to.
On Clause 30, now Clause 31:
HON. SEN. PHULU: Madam Chair on Clause 30 now 31, the issues I have raised in my general debate. I have now seen that the Act did not apply in the sense that the Act is very clear that at some future dates, other Acts of Parliament have passed amendments, speaking to each class of public office so it will not remain very broad for too long. In any case it is not very broad because paragraph (a) to (h) actually limits the application for now to those listed in those paragraphs. Furthermore, I see the issue of seniority, it says every public officer of the above has specified level of seniority employed or holding an office, so regulations will then be passed. I am simply saying it covers initial reservations. If you go down even the issue relating to value of movable not immovable, again I see that it is covered, I had not read it properly.
Finally, the one to which I would like to raise, on page 23 what would be Section 102 (a) subsection 4 (a) (b) (c) on paragraph (c), which talks about the extent to which the asset disclosure regulation, shall, with respect to the extent of the asset disclosure requirement, apply to spouses, children and other dependents on non-dependent family members and business on non-business associates of the public officer concerned.
Madam Chair, does this mean that my drinking buddies who are my line business associates will also be caught in this dragnet without proving more in terms of the association. Is there something that is going to be required for them to prove more other than simply to refer that they drink together.
Also non dependent family members, if I sire a child that I have never known all my life and one day someone discovers that this is my child would they then be subject to the penalties under this Act because their father who they do not know is a public officer. I am saying this is too wide, it is so wide this application without any further inquiries being required to be put into effect. I think it is undesirable. Certainly, it is very broad.
THE MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D. K. MNANGAGWA): Thank you Madam President and I thank the Hon. Senator. It would seem that the previous submissions have been clarified expect for Section 4 subsection (6), which speaks to the length and breadth of where the net can be cast on non-business associates for drinking buddies, illegitimate children. I think if you are a public official and the net has been cast very wide, I do not think one should be worried if they have not been corrupt. If it goes to your drinking buddies and they have not benefited from your public office, then one should not be worried how far the net is being cast in this quest to curb corruption.
So, I would think that as wide as it goes, it should and not be limited to just the public official. I believe that corruption, money laundering have become sophisticated to the point that it can be aided by strangers as well so we would be comfortable living it as it is to ensure that those who might have benefited by proceeds of corruption have not invented new structures that can allow those outside of close proximity to conceal the benefit that they have gotten. So, I would think that will be fine. With that said Madam President, I am being advised by the Minister of Justice that we can strike down the non-dependent family members and the non-business associates. So, I will take back my previous submission, dependents off, including those non-business associates. I think we stand better guided by our legal opinion. I thank you.
THE TEMPORARY CHAIRPERSON: Hon. Minister, are you proposing an amendment?
HON. K. D. MNANGAGWA: Madam President, I propose an amendment that we strike down and remove the phrases of non-dependent family members. This is on page 23, Section 4 (c) under section 30 on page 23 subsection 4 (c). The extent to which the asset disclosure requirement shall apply to spouses and children and other dependents. We strike down on non-dependent family members and business and then we strike down on non-business and leave the rest as it is.
So, it will read; ‘the extent to which the asset disclosure requirement shall apply to spouses and children and other dependents and business associates of the public officer concerned’.
Amendment to Clause 30, now Clause 31 put and agreed to.
Clause 30, now Clause 31, as amended, put and agreed to.
House resumed.
Bill reported with amendments.
Bill referred to the National Assembly for consideration.
Third Reading: With leave, forthwith
THIRD READING
FINANCE (2024) BILL [H. B. 8A, 2024]
THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT, AND INVESTMENT PROMOTION (HON. D.K. MNANGAGWA): I move that the Bill be now read the third time.
HON. SEN. PHULU: Is it being read with any amendments or without amendments?
THE HON. DEPUTY PRESIDENT OF SENATE: With amendments. I thought we said we received the report from the Committee with amendments and I will make a caveat at the end.
Motion put and agreed to.
Bill read the third time.
HON. SEN. PHULU: Mr. President, the questions on the Order Paper were suspended until we finish this business. This business is now being finished, the questions on the Order Paper are now back and we must suspend the debate before we suspend the House.
THE HON. DEPUTY PRESIDENT OF SENATE: Order, Order! – [HON. MEMBERS: Inaudible interjections.] – Order, Order! Order! We suspended business, we have concluded this particular Order of the Day and we have decided that we are going to adjourn, period!
On the motion of THE DEPUTY MINISTER OF FINANCE, ECONOMIC DEVELOPMENT AND INVESTMENT PROMOTION (HON. D.K. MNANGAGWA), the Senate adjourned at Five o’clock p.m.