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SENATE HANSARD 30 JANUARY 2019 VOL 28 NO 26

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PARLIAMENT OF ZIMBABWE

Wednesday, 30th January, 2019

The Senate met at Half-past Two o’clock p.m.

PRAYERS

(THE DEPUTY PRESIDENT OF SENATE in the Chair)

ANNOUNCEMENT BY THE HON. DEPUTY PRESIDENT OF SENATE

INVITATION TO A CONSTITUENCY DEVELOPMENT FUND WORKSHOP

          THE HON. DEPUTY PRESIDENT OF SENATE:  I wish to inform the Senate that all Hon. Senators are reminded to attend a workshop on Constituency Development Fund (CDF) to be held tomorrow Thursday, 31st January, 2019 from 0830 hours to 1000 hours at the Harare International Conference Centre (HICC) in the Jacaranda Room. Please note that Committee meetings will commence at 1030 hours to allow Members time to travel from the venue.

SECOND READING

FINANCE (NO. 3) BILL [H. B. 9, 2018]

          First Order read: Second Reading: Finance No. 3) Bill [H. B. 9, 2018].

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Mr. President. The Bill seeks to give effect to the fiscal measures that I proposed through the National Budget Statement delivered on the 22nd November, 2018 and also to improve revenue collection and administration.  The opportunity is also taken to amend other Acts having fiscal, financial or investment implications.

          In summary, the Bill provides for the following:

          Income Tax

          Personal Income Tax

          This Bill proposes to alter the income “Bands” according to which rates of income tax are calculated.  The main alteration is to the minimum level of income that will attract income tax.  At present the minimum is $3 600 per annum, and this clause will increase that amount to $4 200 per annum.  The highest marginal tax rate has also been reviewed downwards from 50% to 45%.

          Intermediated Money Transfer Tax

          Hon. Members would be aware that the Finance Act, 2002 introduced a tax on transfers of money between persons mediated by financial institutions otherwise than by cheque.

          The Bill seeks to give effect to the new enhanced rate of intermediated money transfer tax provisional introduced through Statutory Instrument 205 of 2018.  The Bill also defines the scope of exemptions from the tax.

          The Bill further seeks to clarify that any amount of Intermediated Money Transfer Tax is not deductible for tax purpose.

          Deemed Income Provision: Satellite Broadcasting Services and Electronic Commerce Platforms

          Mr. President, the Bill seeks to deem certain income to be from a source within Zimbabwe even if earned by service providers domiciled outside the country. Consequently, revenues earned in Zimbabwe by foreign-based satellite broadcasting services and electronic commerce platforms will be deemed to be from a source within Zimbabwe.

          Allowable Deduction in Respect of Two or More Mining Locations

          In order to safeguard revenue, the Bill proposes to amend the legislation, in order to provide clarity regarding the concept of “Inseparable or Substantially Interdependent” operations.

Tax Debts of Voluntarily Wound Up Companies

          Mr. President, I raised concern in my Budget Statement about company directors who evade tax by voluntarily winding-up a company and subsequently incorporating another, albeit the company doing the same business as the old one.

          The Bill thus seeks to compel directors and shareholders of such companies to be jointly and severally liable for any amount of tax due.

Withholding Tax on Contracts

          The Bill seeks to exempt payments to non-resident persons from withholding tax, in circumstances where they do not file tax returns, since they are not compelled to do so.

          Anti-Avoidance and Transfer Provisions

          The Finance Act of 2014 incorporated certain anti-avoidance and transfer pricing provisions in the Income Tax Act.  The Bill seeks to improve the Transfer Pricing provisions through provision for penalties on a graduating scale for failure to adhere to transfer pricing provisions.

          The Bill also seeks to compel taxpayers to submit annual returns showing transactions entered between controlled and/or associated enterprises and also provide for Transfer Pricing Documentary Requirements which will act as a guide to associated enterprises in the recording of transactions in compliance with the Arm’s Length Principle.

          Value Added Tax

          Payment Basis for Value Added Tax

          The Bill seeks to extend the meaning of “time  of supply”, such that, in the case of a supply of moveable goods, the time of supply will be the time of removal of that moveable good from the place of sale.  In the case of supply of immovable goods, the time of supply will be the time when the recipient takes possession of such goods.  Furthermore, in case of a supply of a service, the time of supply will be the time when the service is performed.

          Permissible Deductions in Respect of Input Tax

          The Bill seeks to provide that a registered operator cannot deduct any amounts from the input tax that would be as a result of applying a rate of exchange in excess of the parity rate of one United States dollar to a Bond note unit.

          Payment of Tax in the Currency Trade

          Mr. President Sir, the Bill seeks to oblige a registered person to pay VAT in the same currency that he or she would have been paid in respect of taxable supplies.  It also provides for a civil penalty for the evasion of this provision.

          Customs and Excise

          Power of Customs Officers to Inspect Residential Property

          The Bill seeks to give Customs officers the right to obtain a warrant from a magistrate authorising them to search any private residences that are reasonably suspected of being used to store uncustomed goods or commit contraventions of the Customs and Excise Act.

          Mines and Minerals Act

          Remittance of Royalties

          Mr. President, the Bill seeks to introduce a civil penalty for failure to timeously remit royalties payable on minerals.

          Revenue Authority Act

          Expedited Procedure for Recovery of Outstanding Taxes

          The Bill seeks to provide an expedited procedure for recovery of outstanding taxes in a manner which is simpler and fairer than the previous one.

          Mr. President Sir, I now move that the Bill be read for the second time.

          HON. SEN. TIMVEOS:  Thank you very much Mr. President.  I just want to note with dismay that we have just received this Bill now and as you can see, with all the pages that it has, we cannot go through it at this moment in time but I want the Hon. Minister to clarify something that he said to say, this Bill is going to allow them to go into private people’s homes to search if they possibly suspect that there is money that is acquired illegally or something like that.  I want clarification on that one

          HON. SEN. MOHADI:  Thank you Mr. President.  First and foremost, I would like to thank the Hon. Minister for presenting the Second Reading of this Bill.

          Mr. President, I think the issue of the documents is that these were brought in long back, before the end of the year.  Unfortunately it has taken us time to resume sitting and we seem to have forgotten but we got these Bills last year.  I remember taking mine but I did not read it through and it was overtaken by events.  So we cannot give excuses that the document was brought in today.  I think this was just a reminder, according to me and there is nothing that should stop us from proceeding with the debate.  I thank you. – [HON. SENATORS: Hear, hear.] –

          *HON. SEN. MALULEKE:  Thank you Mr. President.  I would like to thank the Hon. Minister for this Bill.  We were all waiting for it to be tabled in order for our things to move.  I thank you.

          HON. PROF. M. NCUBE:  Thank you Mr. President sir.  I have noted the contributions from the Hon. Members and I thank them for their contributions and comments. 

          On the first item, the document has been well-handled by the stance from Hon. Sen. Mohadi that these documents were distributed earlier for consideration by Hon. Senators. 

          On the issue of the searches, I must say that this issue was dealt with and simplified in the National Assembly so that it is not too different from what is currently the case.  At the moment, the Customs officials have a right enshrined in the law to be able to search premises if they believe these premises are being used for commercial purposes and there is certain commercial activity which is evading taxes.  This is already happening, so there is nothing new that we are trying to do except to close further loopholes, this is nothing substantial. I thank you.

          Motion put and agreed to.

          Bill read a second time.

          Committee Stage: With leave, forthwith

COMMITTEE STAGE

FINANCE (NO. 3) BILL [H. B. 13A, 2018]

          House in Committee.

          Clauses 1 to 8 put and agreed to.

HON. SEN. MWONZORA:  Mr. Chairman, I have a minor point which needs clarification from the Minister.  It is unfortunately on Clause 6 but it will generally apply to all the clauses where money is mentioned.  What denomination are we talking about?  For example when you say $500 000.00; is this US$500 000.00 or 500 000.00 bond?  I foresee a situation where somebody says I am providing service but this service is below US$500 000.00 and therefore I am exempted.  If you look at that service, it may be worth 600 000.00 bond but below US$500 000.00.  What money are we talking about?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  Thank you Hon. Sen. Mwonzora.  This is 500 000.00 bond – [Laughter.] -

Clauses 9 to 17 put and agreed to.

On Clause 18:

HON. SEN. MWONZORA: I am sorry Mr. Chairman, I come back to the same point. What it seems to be saying there is about a parity rate.  I suppose this means one as to one that we were referring to.  That then suggests that there is a Zimbabwean currency because we have no such currency as bond when we talk about money.  That seems to suggest that there is a Zimbabwean currency.  That is why you are talking about a parity rate.  I want you to clarify – the US$ to what?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  As you recall, the bond note was introduced as a way to ease the cash crisis and it was set at the rate of 1:1 with the USD.  It is equivalent to that and it is explained – [HON. MEMBERS:  Hear, hear.] –

THE DEPUTY CHAIRPERSON:  Order, order. Can we please pay attention?

Clause 18 put and agreed to – [HON. SENATORS:  Inaudible interjections.] –

THE DEPUTY CHAIRPERSON:  Order, please!

HON. SEN. ENG. MUDZURI:  I am sorry I came late but on Clause 18, I was looking at this if the price for the taxable...

          THE DEPUTY CHAIRPERSON: Sorry Senator, that may be unprocedural because that has already been agreed to.  So, we cannot go back to amend.  It has already been endorsed, it is now past.

          HON. SEN. ENG. MUDZURI: When you say it has been agreed to, that is why I apologized because I came late.

          THE DEPUTY CHAIRPERSON: Sorry, but in terms of procedure if you can debate to it, you can debate after the sitting because it will not change anything.  Once we say ‘agreed to’, we cannot go back and reopen the issue.

          HON. SEN. ENG. MUDZURI: Thank you for that.

          Clauses 20 to 23 put and agreed to.  – [HON. SEN. SHOKO: Inaudible interjection.] –

          THE DEPUTY CHAIRPERSON: Order Hon. Sen. Shoko and the Hon. Sen. to your left.

          HON. SEN. SHOKO: Mr. Chair, I was not talking, I was just smiling to what is happening in the Senate – [Laughter.] –

          THE DEPUTY CHAIRPERSON: Unfortunately, the smile created some noise – [HON. SENATORS: Inaudible interjections.] - Hon Sen. Makone and Hon. Sen. Timveos please.

          On Clause 24:

          HON. SEN. ENG. MUDZURI: I want to go back to the Finance Minister. He has written ‘Be liable to a secondary civil penalty of US$30’.  Are we talking of United States dollars or a mixture? – [HON. SENATORS: Inaudible interjections.] –

          THE DEPUTY CHAIRPERSON: Order, there is only one person on the floor and that is Hon. Sen. Eng. Mudzuri. You cannot hijack his opportunity to speak. If you want to speak, you can raise your hand and you can be granted the opportunity also.

          HON. SEN. ENG. MUDZURI: My question is on the specification -  US$30 or the maximum monetary figures specified from time to time for the level but for now, which dollars because there is bond and United States dollars?

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Thank you Chair.  I thank Hon. Sen. Eng. Mudzuri for that question.  This rightly reads US$30; it is payable in bond because the exchange rate is parity and we are in a multi-currency regime.

          HON. SEN. ENG. MUDZURI: Can we be able to specify then that in the absence of US$30 then you can pay in 30 bond or RTGs because – [HON. SENATORS: Inaudible interjections.] –

          THE DEPUTY CHAIRPERSON: Please if you want to take the floor, indicate and I will give you the opportunity.

          HON. SEN. ENG. MUDZURI:  I am saying if we do not specify here, it is saying ‘or the maximum monetary figure specified from time to time for the level 4 whichever the level that is’. If there is any other specification but as of now, we have these two.  It is not being taken equally especially when you are buying fuel or anything; you know that it is not equal.  So, can we be able to specify whilst we are still making the Bill.

          HON. PROF. M. NCUBE: The paragraph is clear, it is also clear that we are in a multi-currency regime and we have parity.  So you can either read this as United States dollars or bond but if it is convenient for you, bond or RTGS because again the policy is one of parity across those 3. This is according to policy.

          HON. SEN. MWONZORA: Thank you Minister, from a drafting point of view, elsewhere we have distinguished between the US dollar and money other than foreign currency which includes bond notes and RTGS.  We have distinguished it in a previous clause, which means United States dollar does not mean bond.  Therefore, to convey the actual meaning that you want to convey there, it must specify that it is either payment in hard US currency or in currency other than foreign currency to take into account so that you do not have an administrative official saying that it is clear that it is written US dollars, therefore pay hard currency.  To cushion our people from there, it must be specific that the payment shall be either in hard currency or in money other than foreign currency.

          HON. PROF. M. NCUBE: I have no objection to that, but what is clear is that we have in terms of policy a one to one conversion that is what we have absolutely.  In fact, that is the issue and that is the transaction issue. It is that conversion and that is very simple.

          HON. SEN. MAVETERA: I think we need to take this exercise very seriously, noting that we are representing people who will only come face to face with the court and being asked to pay in US dollars.  The courts are very clear, they read what is written. I do not know why the Minister wants to take us through such a difficult exercise of bond, US when it fits or suits them.  If they are very honest; for this country to go forward, we need honest people – [HON. SENATORS: Hear, hear.] – not people who pretend.  We are not here to act; I do not think we need to waste our time doing things which do not work.  Right now, you are saying – [HON. SENATORS: Inaudible interjections.] – protect me Mr. Chairman, I think I need your protection.

          THE DEPUTY CHAIRPERSON: Order Hon. Senators. You are protected.

          HON. SEN. MAVETERA:  At the moment, we have got the rural folk who may actually be found wanting on this piece of legislation and when it is interpreted, it is US dollars.  I find it very difficult to understand.  If the Minister or the Government says if you transact, in their honest saying bond and US are trading at par, why should Government say if I get a United States dollar then I should put it in US dollar if bond is real money for you?  I think we need to be honest if we are going to carry this country forward.  I think it is very unfortunate that we are taking the country to this level but at the end of the day, you know life is very tricky.  If you lie; facts will always be facts, we will not bring this country back. We cannot sit here and take a break when we are still dragging. We want to revive this country. This country does not belong to anyone, we need honesty and if it is a difficulty, we would know that we are under a difficulty and we will find solutions and not pretend like this.  I find it very unfortunate. 

          So, Hon. Minister, I think, we as Government should not take people for granted.  We used to have bearer cheques introduced by the former Governor Gono and we accepted them and worked with them.  Why should you continue to talk about the bond notes when it suits you?  It becomes very confusing and I am not very surprised when people say it, they are confused and they cannot follow this.  You use US dollars when it suits you. When you want US dollars, you want me to pay in US dollars and when you pay me, you give me bond notes.  I think we need to be honest as leadership and not pretend – [HON. SENATORS: Hear, hear.] – I think this is my submission.

          HON. PROF. M. NCUBE: The bond note is legal tender and it is set at parity to the US dollar.  This is in terms of Section 44 of the Reserve Bank Act – [HON. SENATORS: Inaudible interjections.] – Citizens can pay…

          THE DEPUTY CHAIRPERSON: Order.  I think the Minister is explaining a very fundamental point, can we listen to him.

          HON. PROF. M. NCUBE: Thank you Mr. President Sir.  I will begin by thanking the Hon. Member for his passionate contribution to the question.  The bond note is the legal tender.  In terms of our policy, it is set at 1:1 to the US dollar.  Citizens are paying the Government at this rate.  This is in terms of Section 44 of the Reserve Bank Act, there is no confusion.  I thank you.

          HON. SEN. MAKONE: Thank you Mr. President.  Through you, I would like to confirm with the Minister.  It is not a real question, you can either agree or disagree.  I can see that the clerk is writing everything that he is saying.  If he is not going to revise this and I fall far with the law where I am required to pay USD30, I can take my copy of this to the court and say the Minister said it is the same and here is your 30 bond, it is equivalent to the US dollars.  Will that be accepted?

HON. PROF. M. NCUBE: Yes.

          HON. SEN. ENG. MUDZURI: The President of the country announced fuel prices.  Firstly, at the pump price for locals, in US dollars for foreigners, that is why I wanted it specified.  Let us not just bit the tables in excitement, let us be practical and see what is happening in the streets.  I have been asked to pay in US dollar for my medication and I have to get the foreign currency in the street and not in the bank.  In addition, you have asked us to change our deposit accounts to one called a nostro and RTGS and we are saying 1:1.  Let us be practical please, the common man is suffering out there.  Let us define the correct thing. 

          If I go to CMED today, the fuel price is not one is to one, it is 3, let us be practical.  Your announcements show us that it is not correct, so let us define it correctly.  When we pronounce the Budget, we said it was in US dollars but the practical side is that when you want to buy anything, you are asked to buy the dollar itself and it is five times the difference.  I have been trying to buy a simple thing like an electrical gadget, the traders want either bond or US dollar and they do not even want RTGS because they want to go to the street and buy a US dollar.  I ask you Minister to go into the streets and ask where they get the US dollar.  Once we pronounce a dollar here, we will be asked to pay a US dollar.  Can we pronounce a bond on 1:1 to a dollar and write it correctly as we are pronouncing it in this House.

          HON. PROF. M. NCUBE: I am very comfortable to add in brackets, which is equivalent to the bond note.  I was asked by Hon. Sen. Makone whether the bond will be accepted if one was found to be liable to a penalty and I said yes.  I repeat that, frankly, that cannot be a punishment to Zimbabweans.  From your own argument, it sounds like that will be a relief rather than punishment that they are able to pay in bond notes.  Should you wish us to add in brackets, something that says, a bond; we will have to do that. I know that the Bill cannot be changed but I want to give it time.

          You talked about an announcement, remember this is payment to Government itself and the Government sets the policy and very specific on this issue, it is not a general issue.  It is being said by the Government itself and it is a policy.  Thank you Mr. President.

          HON. SEN. MWONZORA: Mr. President, I want to thank the Minister for clarifying on the 1:1 and that the Payee is the Government.  However, Hon. Minister, not every person in Zimbabwe has the privilege that Hon. Sen. Makone here has, of knowing these proceedings and the existence of a Parliamentary debate.  So, the law must be clear.  There are no two laws; one law is in the Parliamentary debate and the same in the Act.  In the Parliamentary debate, Hon. Minister, you have explained and it is clear.  In the law, it is not clear.  I think a law must be easily interpreted, it must not have two interpretations.  As it stands, this has two possible interpretations, that it is US dollar hard currency and secondly that it is US dollar or bond using parity.  For that reason, and because you have no objection, I propose that we add that ‘payment, using the parity rate in bond note or RTGS, shall be deemed to be acceptable in fulfillment of this Clause’;  just to be clear because when we go out there to the courts, I am speaking from experience; when you go to the courts and there are two interpretations, the discretion is that of the Magistrate.  So, to remove that, let us just have something that is very clear.

          HON. PROF. M. NCUBE: I thank Hon. Sen. Mwonzora for his impassionate input on this issue.  This is very clear Sir.  We have a multi-currency regime, we have a parity rate, we are paying to the Government and the Government has set a policy.  Surely, were we to deviate from that policy by not accepting the bond note, the citizens have a right to challenge that.  This is very clear.  There is no confusion, there should not be any confusion – [HON. SENATORS:  Hear, hear.] –

HON. SEN. MAVETERA:  I would like to thank the Hon. Minister for his explanation to try and clear this grey area which is confusing but very pertinent.  What we are discussing here is public and I think it would also be very important if I could just ask a very simple question to the Minister to say, as Government, when we say petrol is $3.11 and a foreigner can come and buy it at US$1, are you subsidising foreigners at the expense of your citizenry?  I think if you say that, the citizens out there will know that because we need to be practical.  We need it to be real, not imaginary situations. 

So, that simple statement if you say so, will be very happy.  I would go out of here and say, Government prefers foreigners.  You are subsidising foreigners.  You pay more because this explanation, this is all what it leads to.  I think, like Hon. Sen. Mwonzora said, he is a lawyer; law must be very simple for a lay person like me to understand than to be so confusing.  So, can I have a response from the Minister that the position of Government is that we are subsidising foreigners when it comes to fuel and we are made to pay more as citizens?

HON. PROF. M. NCUBE:  Again, I thank the Senator for his passionate contribution and I sense a desire to protect Zimbabweans all the time, which we appreciate.  I must say that issue that you raise is not before us right now.  We are not discussing the fuel issue.  It may be an issue for another time and I will be happy to respond.  I am being honest about that.

There is a very clear issue here.  There is no foreigner and no citizen.  That is not what we are discussing.  In future, we may deal with that issue if it is so appropriately raised, but I can assure you that since we are saying we have a 1:1 exchange, we have a multicurrency regime, the bond would be accepted.  It is Government policy; it is being paid to the Government.  Surely, we cannot be clearer than that.  I thank you.

HON. SEN. KOMICHI:  Thank you Mr. Chairman.  I am swimming in a pool of confusion, Hon. Minister.  I heard that the 1:1 ratio that you have just declared is meant to do with the payments to the Government, but we are allowing the practice that is taking place so far mainly in the pharmacies.  When I pass through the pharmacy, I am charged two prices – one bond note, one United States dollar.  Are we allowing that practice to take place in the country when you know for sure when we make payments to the Government, we pay on a ratio of 1:1?  What should I do if I go to a pharmacy today and I am charged US$30 and then $400 RTGs?  Should I refuse to pay $400?  Should I pay 30 bond notes?

HON. PROF. M. NCUBE:  Again, I think we are straying from the issue that we are discussing here.  The Hon. Member is referring to the experience when they visited a pharmacy.  I am afraid that is not what is before us.  What is before us is very straight forward, it is about a penalty which is supposed to be paid to the Government and we have very clear interpretation that we will accept, as Government in terms of our policy, the bond note on a 1:1.  It is very clear.  I have said that I think this is the third time, Mr. President, respectively Sir.  I have said the same thing and again, I still note that the same question still persists.

HON. SEN. KOMICHI:  We would kindly ask the Hon. Minister to come for question time tomorrow so that at least we can have these questions answered.

HON. SEN. S. NCUBE:  On a point of order Hon. Chair.  I think every question that is posed in this House must be answered.  I do not think Members are diverting from the Bill that is before the House.  What is happening, the concerns that we have as people of this country is that the United States dollar and the bond note are not the same.  So, that is why we are still asking the Minister.  The Minister has to explain clearly to this House. 

We have problems, for example Minister, we were given monies through our banks.  We have children who are out of the country.  You could just apply to the RBZ and that money was 1:1 at that time.  Now we do not have that access and we are no longer given those monies.  We are buying United States dollars on the black market and the rate yesterday was $360 to US$100.  How many people can afford that? 

Why are you running away from answering the question?  We can try by all means.  Everything has gone up.  Food has gone up and fuel has gone up because of this United States dollar and the bond note.  Can you answer us please?  What is the rate between the bond note and the United States dollar?  It is not 1:1.  We buy the United States dollar from the black market.  We no longer have access to the United States dollar from the bank.  What has happened Minister?

HON. PROF. M. NCUBE:  I have two responses to that.  First of all, I would suggest that the broader issues on the economic debate, broader beyond the Bill perhaps, be set aside.  I will be available tomorrow or any other day when you so wish to call me to answer questions.  I will be available.

Certainly, what we are dealing with in this Bill is specifics.  So, like we dealt in the previous clause, it was about honouring a penalty which is supposed to be paid to the Government in the first place and I was explaining that on that occasion, the policy of Government of 1:1 would be applied and the bond note would be accepted.  Clearly that is a scenario of certainty.  At least you would know what you are in for.  Surely, that can only be a better position than all the other premiums that perhaps you are subjected to out there when you pay for other things.  On this occasion, there is certainty and clarity.  You know what you are in for.  I thank you.

Clause 24 put and agreed to.

          Clauses 25 to 32 put and agreed to.

          On Clause 33:

          HON. SEN. MWONZORA:  It is just for clarification Mr. Chairman.  In this new section Hon. Minister, we are talking of assets, if you could just explain in what sense this then becomes a money Bill.  We are talking about assets/property and not necessarily revenue, if you could just explain there.  How then does it become a money Bill in terms of the Constitution which requires us to treat a money Bill in the way that we are treating this Bill?

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  Thank you very much and can I thank Hon. Sen. Mwonzora for that question.

          In an asset management company, you can manage different types of assets, i.e. cash, property, equity or debt and the Asset Management Unit will obviously have a balance sheet to assets and liabilities and things that go with its financials.  So everything under this unit can be reduced to monetary value. So it does have implications.  So then you will agree with me that anything under the Reserve Bank of Zimbabwe (RBZ) often its special liability ends up with the Minister of Finance and Economic Development, whether it is an issue of recapitalisation.  Here, I am extending the explanation so that you can understand. So it does have monetary implications on Treasury and therefore it should be part of the Finance Bill.  I thank you.

          Clause 33 put and agreed to.

          Clauses 34 and 35 put and agreed to.

          House resumed.

          Bill reported without amendments

          Third Reading: With leave, forthwith.

THIRD READING

FINANCE (NO. 3) BILL [H. B. 13A, 2018]

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Mr. President Sir, I now move that the Bill be read the third time.

          Motion put and agreed to.

          Bill read the third time.

SECOND READING

APPROPRIATION (2019) BILL [H. B. 12, 2018]

          Second Order read: Appropriation (2019) Bill [H. B. 12, 2018].

           THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  Mr. President Sir, the purpose of this Bill is to give effect to the Main Estimates of Expenditure for the year ending 31 December 2019 which I tabled to this august House on 22 November 2018.

Section 3 of the Appropriation (2019), 2018 Bill charges the Consolidated Revenue Fund with a sum of US$6 492 910 000 which relates to the 2019 Vote appropriations.

Section 4 of the Appropriation (2019), 2018 Bill charges the Retained Funds with a sum of US$406 927 000 which relates to the 2019 Vote appropriations.

This gives a total charge on the Appropriation (2019), 2018 Bill of US$6 899 837 000. The Vote appropriations have been guided by the Transitional Stabilisation Programme premised on the mantra “Zimbabwe is open for business” which places a premium on structuring a market-based economy and sustained private sector initiatives of transforming the country into an upper middle income status, anchored on the following fundamental values:-

  • Improved governance and rule of law;
  • Re-orientation of the country towards democracy;
  • Upholding freedoms of expression and association;
  • Peace and national unity;
  • Respect for human and property rights;
  • Attainment of responsive public institutions;
  • Broad based citizenry participation in national and socio-economic development programmes;
  • Political and economic re-engagement with the global community;
  • Creation of a competitive friendly business environment;
  • Enhanced domestic and foreign investment and
  • An aggressive fight against all forms of corruption.

Overally, it is imperative to contain expenditures, particularly employment costs in order to re-orient the thrust of fiscal expenditures towards infrastructure development, particularly in the energy, water, transport and ICTs sub-sectors.

          Section 6 (1) of the Bill empowers the Minister of Finance and Economic Development to transfer funds already approved by Parliament between Votes in respect of a function or responsibility transferred between ministries and departments during the course of the fiscal year.

          Section 6 (2) of the Bill allows discretion to the Minister of Finance and Economic Development to transfer funds from the Unallocated Reserve which appears on the Ministry of Finance and Economic Development Vote to any other Vote as and when the need arises in order to meet inescapable expenditures.

          In addition and if necessary, the Minister of Finance and Economic Development can vary the amounts so transferred by taking back any surplus for reallocation to other ministries to meet demands that may arise.  Mr. President Sir, I accordingly move that the Bill be now read a second time.

          HON. SEN. MOHADI:  Thank you Mr. President.  Once again, I want to thank the Minister for giving himself time to be in this august House.  I know it is a lot of work to do and he has really taken his time to do so.  With much ado, I support the second reading of this Bill.

Motion put and agreed to.

Bill read a second time.

Committee Stage: With leave, forthwith.

COMMITTEE STAGE

APPROPRIATION (2019) BILL [H. B. 12, 2018]

House in Committee.

Clauses 1 and 2 put and agreed to.

On Clause 3:

HON. SEN. ENG. MUDZURI:  I just want reaffirmation from the Minister that this is six billion from the Consolidated Revenue Fund.  Is he confirming that this is not USD?  Is this RTGs because most of the revenue comes from non USD accounts?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE):  I confirm that in terms of the accounting of Government as led by Treasury, we use a multi-currency regime and the official conversion rate is 1:1.  That is what it is.  We were very consistent in our accounting and the way we receive our taxes.  There is no ambiguity or any cross confusion in that regard.

HON. SEN. ENG. MUDZURI:  Hon. Chair, this is money.  The 6 billion budget can be accepted but what the Minister is saying is that he is going to collect a one on one revenue from the public.  This is public money – that is 6 billion of the public money.  This public money is not really the same.  This brings me back to my earlier argument where we talked about fuel at CMED which costs $3.  When revenue is coming, it will be like USD when in actual fact it is not USD.  This budget will look false in the sense that if you say that this is US$6 billion and you mix the money, you are not going to end up with 6 billion dollars.  I do not even know how we are going to do the taxation of the two regimes in the actual market out there when you insist that the Government says it is one to one.

I just want us to be clear because we agreed that this budget is in the real USD term which means because of the multi-currency system, you can exchange a USD for any other currency, which makes other currencies like rand, Chinese Yuan and any other currency but we are collecting money out there not in USD terms.  This 6 billion will come out in a different form.  Let us have a practical budget.  I am just appealing to you to say, is this 6 billion coming in USD as we agreed in the Standing Rules and Orders that our budget is strictly in USD.  When you ask me to buy a car, coming from Government – I must go and say I have got US$30 000 and you are paying US$30 000 and not bond or any other currency.  It is you who can detect that but when you are collecting, it is the other way.

HON. PROF. M. NCUBE:  I must say that he is still asking the same question as before and I have dealt with this.  I have said that if we should perhaps generalise about the economy and I have said the same thing to the others. I am available for a more open discussion about the economy and where it is going.  We have a method of collecting taxes.  We are collecting and I am assuming his is paying his taxes at the moment.  I do not think there is any confusion as to how we are collecting taxes or how we are accounting for them. 

If you opened the newspaper last week, ZIMRA published the amounts that we are collecting.  We have absolutely no confusion.

Clause 3 put and agreed to.

          Clauses 4 and 5 put and agreed to.

          On Clause 6:

          THE DEPUTY CHAIRPERSON: I still call for order, I know this is about money and economy so the interest is high but listen attentively also.

          Clause 6 put and agreed to.

          On Schedule IV:

          HON. SEN. ENG. MUDZURI: I want the Minister of Finance to clarify on 5, his Ministry is having US$275m, some of the ministries have a reasonable breakdown and his ministry has much more money than even the third arm of Government which is Parliament.  I am not sure what is the breakdown in the Ministry of Finance for US$275m, there is no breakdown to say what is it, is it for administration et cetera?

          HON. PROF. M. NCUBE: Thank you Hon. Sen. Eng. Mudzuri for your question. You will recall that the Ministry of Finance also holds back certain reserves which can be applied in terms of need for any needy of the ministries. So you will find that the size of our budget also reflects this and in fact with all the demands that you see at the moment for civil servants salaries, even more expensive cars for Senators and Members of Parliament, all of this, we try to take care of that using those reserves sitting in Treasury.  As I speak, I cannot even say we have a lot of money that is allocated to us.  You can be sure that it will all be applied appropriately.  I thank you.

          HON. SEN. ENG. MUDZURI: What I am asking is for a reasonable breakdown to say maybe this is for reserves, administration.  Parliament has a responsibility to know really whether money was used appropriately so that responsibility must come when we now look at this US$275m.  You can verement funds according to what it is but where are you verementing it for.  This is purely administrative to say the salaries were done what else is being done in the Ministry of Finance; the reserve must be shown, that is what I am asking for.  We know we have got cheap cars for Ministers and Senators want expensive cars but let us just see the breakdown.

          HON. PROF. M NCUBE: Thank you again Hon. Mudzuri. If you go into the Blue Book, you have got a breakdown for every ministry, it is quite clear, you can take a look at that and that will give you a good guidance as to how that is broken down. You can imagine that obviously there are issues like personnel and it costs quite a bit in terms of salaries that tend to be the bulk in terms of our share right across most ministries.  I thank you.

          Schedule IV put and agreed to.

          House resumed.

          Bill reported without amendments.

          Third Reading: With leave, forthwith.

THIRD READING

APPROPRIATION (2019) BILL [H. B. 12, 2018]

          THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE): Mr. President Sir, I now move that the Bill be now read the third time.

          Motion put and agreed to.

          Bill read the third time.

On the motion of THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. PROF. M. NCUBE), the Senate adjourned at One Minute to Four o’clock p.m.

 

Senate Hansard SENATE HANSARD 30 JANUARY 2019 VOL 28 NO 26