Budget brings hope to the poor
Mbongeni Mguni | Tuesday February 4, 2014 15:54
Prior to the budget speech, several commentators had predicted that the 2014/15 budget would not contain adverse levy, tariff or tax pronouncements, but would rather utilise the forecast surplus to give disadvantaged members of society breathing space.
Yesterday, Matambo stuck to the predicted script announcing a raft of tax and social initiatives aimed at uplifting sidelined members of the community.
Included in the initiatives is the introduction of a disability safety net targeted at people living with disabilities who do not have any means of survival.
In addition, Matambo announced that an affirmative action programme for graduates with disabilities is already in operation within government, with 38 of the 63 who applied to the Directorate of Public Service Management being placed in permanent employment.
Other initiatives include the Value Added Tax exemption of currently zero-rated basic foodstuffs, which include maize, sorghum, a variety of other cereals and grains, flour, sugar and traditional beans.
The list of zero-rated items will also be expanded to include vegetables, rice and milk. Matambo said the move to exempt instead of zero-rate the expanded range of food items was designed to “encourage intake of balanced meals for families”.
In addition, the requirement to register for VAT will be increased from P500,000 to P1 million, benefiting small business owners from the burdens of regularly filing returns
Yesterday’s budget statement also unveiled a promise of 100% subsidies for farmers on fertilisers, soil testing, hybrid seeds and herbicides, “provided they adopt modern ploughing methods such as row planting and harrowing”.
The Finance Minister also announced the maintenance of expenditure on the Ipelegeng programme, which he allocated P580.6 million, fractionally down from the P581 million allocated in the 2013/14 budget.
“Poverty remains a major development challenge in Botswana,” Matambo said.
“This situation has continued to weigh down on the country’s human development index.
“While the quality of life has improved, challenges still remain, particularly in the eradication of abject poverty.”
Commenting on the budget statement, Botswana Confederation of Commerce, Industry and Manpower (BOCCIM) CEO, Maria Machailo-Ellis said yesterday’s proposals carried some glimmer of hope for the disadvantaged.
“When you look at the cost of food, especially for low income groups, it’s very important that VAT is cut and helps cushion them on these items,” she told Mmegi outside Parliament yesterday, adding that “It is a clear statement from government to say we do recognise the need to think about the less privileged. These food items are not a luxury.”
Machailo-Ellis expressed delight that the budget had finally addressed BOCCIM’s pleas for an increase in the VAT threshold.
“At last government has agreed to increase the VAT threshold, which we have been advocating for, for many years,” she said.
“We have been asking for this and we are happy that they have come to realise the need to implement it.
“We also hope that the planned review of transfer duty will result in a reduction because it has been impeding people who want to own houses.” However, the 2014/15 budget statement was not all roses as Matambo cautioned that government would need to continuously adjust electricity tariffs to keep in line with the costs of generation and import.
Industry experts estimate that current electricity tariffs are at least 30% below costs of supply, burning a hole in the Botswana Power Corporation’s finances, as well as the subsidies government annually provides to the utility.