Finance and Economic Development Minister, Professor Mthuli Ncube on Thursday presented a $421.6 billion budget for next year that is very relevant to the masses.

Among other positives that the people must certainly be happy about is the considerable tax relief that the national budget will offer them. Also, the worker would have a bigger portion of their bonus tax free, thus ensuring that they have more money in the pocket.

The budget, themed “Building Resilience and Sustainable Economic Recovery” will seek to create an environment under which more jobs would be created and retained while proposing the biggest allocations to social ministries which tend to be closest to the people’s hearts – education and health.

Regarding tax relief measures, the minister reviewed upwards the pay-as-you-earn tax-free threshold from $5 000 to $10 000, increased the transfer tax-free threshold from $300 to $500 and increased the bonus tax-free threshold from $5 000 to $25 000, effective from the beginning of this month.

Furthermore, the minister proposed an upward review of the Youth Employment Tax Credit from $500 to $1 500 to encourage companies to think about hiring more youngsters.

As we have alluded to, the Ministry of Primary and Secondary Education sector has one of the highest overall allocations at $55.2 billion while the Ministry of Health and Child Care got $54.7 billion.

“Government remains committed to improving workers’ disposable income as part of the broader agenda to increase aggregate demand and savings,” said the minister.

“The recent salary and wage adjustments for public and some private sector employees necessitates a corresponding review in the personal income tax framework. I, therefore, propose to review the Tax-Free Threshold from $5 000 per month to $10 000 per month. I, further, propose to adjust the tax bands to begin at $10 001 and end at $250 000 per month, above which the Highest Marginal Tax rate of 40 percent will apply.

The above measures are effective from January 1, 2021. In addition, I propose to review upwards, the bonus Tax-Free Threshold from $5 000 to $25 000, with effect from November 1, 2020.”

Therefore, what Prof Ncube presented on Thursday was a pro-poor budget as it seeks to create more job opportunities, ensure that the people have cash in hand through wider tax bands and so on.

Given the continuing impact of Covid-19, the minister faced a huge task, having to balance the competing interests of the masses on one hand and economic recovery and growth on the other.

We think he achieved that as apart from attending to the needs of the ordinary people, the 2021 national budget proposes support to the productive sectors of the economy. We will therefore see work continuing on various projects such as airports, electricity generation plants, roads and others – the infrastructure that enables business to run.

Going forward, the public and business expect the Government continuing with its prudent management of the economy, the Covid-19 pandemic easing and the rains falling in appropriate amounts for a good harvest to be achieved.

They hope that public spending will be kept in check, the same for inflation, the value of the local currency and other fundamentals.

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