Govt suspends civil servants bonuses

By Bridget Mananavire

HARARE – Government has suspended civil servants’ bonuses for the years 2015 and 2016 with a possible review in 2017, as the tax base dwindles.

The public sector has even been struggling to pay salaries which gobble up about $260 million a month, at 82 percent of the total budget, which had been paid to the civil service in staggered allocations.

According to minister of Finance, Patrick Chinamasa, the 2014 bonus bill reached up to $172.6 million, which the government still had obligations to finish paying, as it is yet to pay State university staff.

Chinamasa said government no longer had the capacity to pay the bonuses, as it had been difficult to collect taxes from the informal sector where economic activity had now shifted to.

He said he did not want to “bleed” the already depressed formal sector.

“There is an urgent need to create fiscal space to finance the ZimAsset programme (economic blueprint). To achieve this, government has decided to suspend bonus payments to the civil servants in 2015, this year and 2016 and to review the situation in the 2017 budget in the event that the situation reflects that we have built enough capacity to honour those obligations,” Chinamasa announced at a press conference held at ministry of Media — Munhumutapa offices — in Harare yesterday.

“As a way forward, this is a matter that we have taken to Cabinet… Essentially I need to put the money where my mouth is, I have been talking about financing ZimAsset, I have been taking about capital formation, I have been talking about the imbalance in allowing all your revenue going towards consumption.

“And in view of what I have just said we have been exploring a number of measures to contain government recurrent expenditure and to channel resources to less capital intensive and high impact public sector investment projects.

He said other measures to create fiscal space were being explored adding that the bonus suspension was the solution at the moment as he did not want to increase tax rates to an estimated 400 000 formal work base.

“I am reluctant to use the tax rate that is increasing taxes in order to increase revenues to the fiscus, in fact to do so will be very negative in my view and it’s like trying to squeeze blood from a stone, so I am reluctant to use that route. I would have it that there is growth in the economy so that we can earn more revenue,” Chinamasa said.

He said he had to announce the bonus suspension early to allow for the civil servants to make plans instead of catching them unaware at the end of the year.

Chinamasa, however, said government was paying people to sit in offices.

“Right now you need to understand that when all is said and done we are paying people to sit in their offices because from this when 82 percent is going to wages, you put it in your pocket, you still need money for operations,” said Chinamasa. Daily News