THE Zimbabwe Revenue Authority commissioner general Mr Gershem Pasi has called for a cut in salaries across the board and for Government to stop creating too many non-productive entities which are draining the already strained Treasury.
Recurrent expenditure is draining about 92 percent of Government revenue. The chief tax collector said Government, employers and labour should resuscitate the social contract in order to stop the country sinking “deeper into the hole”. Mr Pasi said salaries were pegged at artificial levels when the country adopted the multi currency system in 2009 and the national cake cannot sustain such high payouts.
“We pegged our wages and salaries basing on that artificial level which was premised on the hyper-inflationary environment we had just come out of. My proposal is that we have never needed a social contract more than now. And that social contract should not be there to maintain the status quo. Dr Mangudya in his statement urged that there should not be any increase in salaries. What would happen if we went further; let’s cut the salaries. Let’s cut prices,” said Mr Pasi.
Zimbabwe adopted the multi currency system following a run of hyperinflation which led to the collapse of industry which could not sustain operations as a result of the moribund local dollar. Mr Pasi said the country will continue to sink deeper into problems if corrective measures are not taken.
“Otherwise all we are doing will be just fire fighting but the truth is we are going deeper and deeper into the hole until we take drastic measures,” said Mr Pasi. “Why not say cut by 20 percent across the board; cut wages, interest rates, everything because it will be a social contract. We will give ourselves room to start the growth process,” he said.
He said the country should review its costs structures particularly the wage bill.
Recurrent expenditures of about 92 percent continue to outweigh Government leaving only eight percent for capital development programmes. Mr Pasi wants a review of how the budget is crafted in order to adopt a system where “we start with what is available” as opposed to what is expected.
“We also need to review the way we do our budgeting. We should start with what’s available both in terms of anticipated revenue, allowable borrowings and any grants that are assured and then we cut our cloth to fit that revenue plate,”
He suggested that the country adopts a framework which may not be changed at any situation for revenue distribution and called for discipline in relation to following budgetary allocations. To save revenue for capital development Government should avoid creating a multiplicity of non-productive entities which drain the fiscus.
“We continue to create not-so-useful entities. We also created too many independent funds. Why do we create funds which are managed outside the central treasury funds? And when we have created them they are not accountable to anybody,” said Mr Pasi.
Mr Pasi said the new constitution is an expensive venture as it expanded cost drivers putting further strain on the already pressed Treasury. “We have some legacy issues one of which is that during the Government of National Unity we had a new Constitution. It is a very expensive Constitution. Today we are talking of creating fiscal space, you can’t do much with the set up that we have. Look at the expansion that happened with the new Constitution of the legislature. Can we afford it? We created so many additional members in both houses but at the end of the day we must pay for it,” said Mr Pasi. When the expansion was done, there was no consideration on the cost of such an expansion to the legislature, he said.