CRS News Flash 30 November 2021 – GHANA and ZIMBABWE – 2022 Budget Speeches

Ghana Budget Speech
Honourable Dr. Situmbeko Musokotwane, MP, Minister of Finance and National Planning, delivered the 2022 Budget on Friday, 29 October 2021.

Budget highlights

·        Real gross domestic product (GDP) is estimated to grow at 5.9% in 2021, while the global economic growth forecast for 2022 remains unchanged at 4.9% from the July 2021 projection.

·        Overall real GDP is estimated to grow at 4.4% in 2021 and at an average of 5.6% – with yearly growth rates of 5.8%, 5.4%, 5.3% and 6.0% in 2022, 2023, 2024 and 2025, respectively.

·        Inflation is expected to increase by 0.4% points to 5.5% in 2021. Headline inflation is projected to peak in the final months of 2021, with inflation expected to return to pre-pandemic levels by mid-2022 for both advanced economies and emerging market country groups.

·        Government has imposed an electronic transaction levy of 1.75% on the value of digital transactions and exempt daily transactions of a cumulative value of GH¢100 or less, per person. The recommended effective date of implementation is 1 January 2022.

·        With the YouStart initiative as a key vehicle, Government aims to create one million jobs in three years under the GhanaCARES programme.

·        Small-scale gold mining withholding tax on the sale of unprocessed gold is to be reduced from 3.0% to 1.5%, effective 1 January 2022.

·        Raising of the current threshold on turnover from GH₵200,000 to GH₵500,000 for business income of self-employed individuals.

·        No changes to the PAYE rates were proposed.

To read the Budget statement, follow the link.

Zimbabwe Budget Speech
The Minister of Finance and Economic Development, Honour Professor Mthule Ncube, delivered the 2022 National Budget Speech on 25 November 2021.

Budget highlights

·        Expenditure is projected to increase to 927.3 billion Zimbabwean dollars ($8.78 billion) from a revised Z$509 billion estimated in 2021.

·        An economic growth of 5.5% is projected for next year and the aim is for a deficit of 1.5% of GDP in 2022 and 1.7% of GDP in 2023.

·        Average annual inflation is expected to fall from 94.6% in 2021 to 32.6% in 2022 and 17.5% in 2023.

·        Industry capacity utilisation is expected to reach 65% by the end of 2021, from 47% in 2020.

·        The economy is relatively stable as shown by the decline in annual inflation. This was measured by the Consumer Price Index (CPI) with a decline from 837.5% in July 2020 to 54% in October 2021.

Tax relief measures

·        A proposed increase in the tax-free threshold on personal income from ZWL 10,000 to ZWL 25,000. The tax bands will also be adjusted to end at ZWL500,000, above which a marginal tax rate of 40% will apply, with effect from 1 January 2022.

·        A proposed increase to the tax-free bonus threshold from ZWL 25,000 to ZWL 100,000 and the foreign currency tax-free bonus from US$ 320 to US$ 700, with effect from 1 November 2021.

·        Review of the non-taxable portion of the local currency tax-free threshold from the greater of ZWL 50,000 or one-third of the retrenchment package, whichever is higher, up to a maximum of ZWL 240,000, to the greater of ZWL 400,000 or one-third of the retrenchment package, whichever is greater, up to a maximum of ZWL 2 million, for income earned in local currency.

·        Proposal to introduce a tax credit of US$50 or local currency equivalent per employee per month for the employment of physically challenged persons up to a maximum of US$2,250 per year, with effect from 1 January 2022.