Presenting his mid-term fiscal policy review statement, Biti said the 2010 budget will remain at US 2.25 billion dollars adding that the budget can be realigned after the under performance of the vote of credit.
“Our original growth projection for 2010 was 7 percent. However, fragile prospects for recovery in economic performance demand a reduction of this figure. We have, thus, revised our growth projection for 2010 to 5.4 percent,” Biti said.
“The revised figure of 5.4 percent should not be taken for granted. A business as usual mentality will certainly guarantee a further downward revision.”
Biti said Zimbabwe’s growth targets have been revised after little investment has been realised from investors due to the enactment of the indigenization regulations which scared away potential investors.
Biti said the economy had registered positive perfomance in agriculture , mining and tourism sectors.
“Indicators of positive performance in the first half of 2010 have included growth in VAT revenue and output in agriculture (18.8%), as well as projected growth in mining (31%), manufacturing (4.5%), distributioin, hotels and restaurants (3.5%) and transport and communication (3%),” Biti said.
The new tax-free threshhold has been increased from US 160 dollars to US 175 dollars, Biti said in his address. This falls far short of the US$ 500 workers were demanding.
“I therefore propose to increase the tax free threshold from US 160 dollars to US 175 dollars inorder to enhance disposable income in the hands of taxpayers, thereby stimulating aggregate demand for goods and services,” Biti said.
The suspension of duty on basic commodities will be with effect of 31 december 2010.
Biti told parliamentarians that Zimbabwe must be allowed to sell its diamonds as the country has met minimum Kimberley Process requirements in the trade of diamonds.He also proposed that alluvial diamond exploitation must be done by the government.
An international diamond meeting is underway in Russia where a decision on whether Zimbabwe should sell its diamond will be made.
Biti said the country must be guided in the last half of the year by ‘ refocusing, regeneration and revival ‘ of the economy.