Mthuli Ncube forced to backtrack on wealth tax plan, toll and passport fees

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Public condemnation has forced Finance minister Mthuli Ncube to make several revisions to his tax proposals.

Ncube was made to eat humble pies as MPs shot down with precision all his exorbitant tax proposals.

Ncube told MPs road toll fees would go up by 50 percent, backing down from the 150 percent increase he announced on November 30.

The minister also bowed to pressure and said he would lower the price of a standard passport to US$150, after having proposed, in his budget speech, to increase it to US$200 from the current US$120.

The 1 percent wealth tax on home owners was also radically reviewed to affect only second homes, not primary residencies. He raised the threshold to properties worth at least US$250,000 from US$100,000 he proposed previously. The tax will be capped at a maximum US$50,000 per year for properties worth over US$5 million.

Citizens Coalition for Change (CCC) MPs were ejected from parliament and banned for four sittings after singing and heckling when Speaker of Parliament Jacob Mudenda announced Scott Sakupwanya as the new MP for Mabvuku Tafara. Sakupwanya won by default when the CCC candidate, who beat him only in August before he was controversially recalled, was barred by a court from standing.

The budget passed with only Zanu PF MPs present.

In his 2024 budget statement, Ncube had proposed to more than double tollgate fees from US$2 to US$5 or equivalent for light vehicles on what he called “premium roads” – Harare to Beitbridge and Plumtree-Bulawayo-Harare-Mutare. This would have seen a return trip from Harare to Bulawayo with a family sedan costing US$50 at tollgates.

On other roads, toll fees were to go up by 100 percent from US$2 to US$4 for light motor vehicles. The minister has now fixed that at US$3.

“We are proposing that rather than increasing the basic toll fee by 100 percent, I am now proposing that we increase it only by 50 percent. We have lowered the increase,” Ncube said.

“The same applies to the premium roads, again I am not proposing the full amount but only half of that. So, we have lowered these toll fee increases.

“I also listened to a comment that perhaps tollgates that are closer to the city should have lower toll fees than elsewhere. We will look into this. It sounds like a noble proposal because some of the people who live out at the edge of the city or those who work in the city, if they are having to pay high toll fees, we do not want that. We want it to be fair and reflect the fact that the work here we do not want to overly penalise those individuals.”

Ncube had proposed an increase in passport fees from US$120 to US$200 starting from January next year. He told MPs that he had planned to use the money to install automated passport readers at ports of entry to remove the need for human intervention.

MPs said the raise was too high, and Ncube conceded: “On passport fees, we have listened carefully to the contributions from the portfolio chairpersons and Hon. Members that the US$200 is on the high side, we agree with that. It is just that when we were having the discussions about modernising our borders, we wanted to be the first country outside Dubai to have an unmanned border post where you can walk in because now we have an e-passport with a chip in it

“You can walk in and the gates open your passport is read. You do not talk to anybody. We want that equipment here by end of 2024. We have to be modern. That is what motivated us. It is the kind of thinking to say we need resources to support the ministry of home affairs and we thought that increasing passports was one way to do this.

“Someone proposed that rather than US$120 for an ordinary passport, let us make it US$150. It is a proposal, but for the express passport, the 24-hour passport, anyone who needs it urgently is often those who can afford it. That one should be US$250. I know one Hon. Member who proposed US$350, but let us make it US$250 and I think US$250 is okay”.

In his Z$60 trillion budget, Ncube was heavily criticised over a 1 percent wealth tax proposal on properties worth US$100,000 or more.

“On the wealth tax, I accept the contributions from the public, from the portfolio chairpersons and Members of Parliament that we need to move the threshold. Some members suggested that the 70 years exemption should be brought down to 65, again I agree with that.

“We must also exempt the primary residence of an owner of a property… So the primary residence is excluded. In fact, I am proposing a new threshold of US$250,000. I am also proposing a limit as to how much any person can pay. No-one should pay more than US$50,000 per annum. That pertains to a property of about US$5 million. In other words, if you have a property worth about that value and beyond, really you should not be paying more than that, there should be a cap somewhere.”

Parliament adjourned until 12.49AM until January 30, 2024.