According to the adjustments, the tax regime will only apply to those with transactions of $10 and above.
In a statement, Moyo, the leader of a political outfit, Alliance for the People’s Agenda, said the Finance minister was aware of the impossibility of cutting down government overspending.
He said the minister was now mixing a number of sources including the biting taxes to fund the exorbitant government expenditure and reduce external borrowing.
“The minister is trying to change the mix of the sources of government funding as well as reduce the quantum of borrowing. In principle there is nothing wrong with that objective. The trouble is that he has rushed to increase taxes without thinking through the implications on the economy,” he said
“Raising the transaction tax creates opportunities for more spending rather than cutting down on spending. It also shifts responsibility to the already overtaxed citizen rather than putting pressure on the administration to cut down on wasteful spending.
“Over and above it being wrong to start with increasing taxes, this action also has the added effect of shielding government from the need to take immediate action on reducing public spending. I suspect the Honourable Minister knows he will not be able to bring down government spending.”
Moyo said the reduction of purchasing power will only downplay the local production sector and encourage importing.
“From an economic perspective one would have expected him to leave more purchasing power in the hands of the consumer so as to create a demand pull for local production. Reducing purchasing power will lead to consumers looking for the cheapest sources for their needs.
We all know those sources will not be Zimbabwean!”
The former minister who resigned in 2001, under former president Robert Mugabe’s administration, is familiar with the “tight shoes” that the current Finance minister is wearing.
Like Ncube, Moyo was appointed soon after Zanu PF won a heavily disputed election in 2000.
His appointment was hailed by many as the dawn of a new era, the introduction of technocrats into government, breathing a new thinking and better ways of doing things.
Moyo indicated in his resignation that he could not function in a government led by unprincipled people.
In his recent statement, he highlighted how former Finance ministers, Bernard Chidzero (now late) and Patrick Chinamasa had also failed to sail in the similar boat, with a head of State who does not put the economic agenda ahead.
“Generally speaking, saying I told you so is not a good thing, but I would like to use this event as a reminder of something we really need to understand…Chidzero was a good and competent man.
“But as we all know, his political masters had no capacity to understand hence no commitment to implement what needed to be done,” said Moyo.
“Another example I witnessed was Chinamasa when he was working in his area of competence. As minister for Legal and Parliamentary affairs he tried to be professional and do the right thing even towards MDC, but his masters only understood a political agenda.
I mention these two cases to make Zimbabweans understand that until we have a head of State whose agenda is not politics first and economics a poor second and also has first-hand competence in business, we are unlikely to sort out our economic challenges.”
When he quit office, the former minister was criticised by Mugabe for being a coward.
“I do not want ministers who are in the habit of running away. I want those I can call amadoda sibili (real men), people with spine,” the former president was quoted saying.
Moyo is a politician and economist, who holds a PhD in Physics from the Imperial College (University of London).
When he quit his ministerial post in 2001 he went to join his family in South Africa. Daily News.