Bill Watch 01 - 2019 Update on 2019 National Budget

BILL WATCH 1/2019

[14th January  2019]

Both Houses of Parliament are in Recess until Tuesday 29th January

Last Parliamentary Sittings of 2018

Both Houses of Parliament reassembled  on Tuesday 18th December and completed three sittings before adjourning until Tuesday 29th January.    

The National Assembly approved:

·        the Estimates of Expenditure for 2019, with an increase in the amount allocated for Parliament

·        the Appropriation (2019) Bill [link] and the Finance (No. 3) Bill [link] with amendments

The Senate will only receive the approved Bills when it meets again on the 29th and will have to deal with them then.  

National Assembly

The National Assembly concentrated on Budget business all week – and managed to complete it in a final marathon sitting that started at 2.15 pm on Thursday 20th December and ended just after 1 am on Friday 21st.  

Tuesday 18th December   The Budget debate resumed where it had left off on 6th December [when the National Assembly adjourned for the ZANU-PF Conference].  The remaining nine Portfolio Committee reports were presented.  Contributions to the debate by individual MPs followed, starting with a speech by former Minister of Finance Tendai Biti [link] in which he not only criticised the economics of the Budget but argued that it was marred by inconsistencies with the Constitution and other laws.  Proceedings ended at 7.18 pm.  

Wednesday 19th December  Debate continued briefly on Wednesday.  After the last individual contribution, the Minister replied at length to points raised.  The House then approved the introduction of the Finance (No. 3) Bill which was promptly given its First Reading and sent to the Parliamentary Legal Committee [PLC].  Proceedings ended at 5.18 pm.  

Thursday 20th December  On Thursday the order of business was consideration of the Estimates of Expenditure, followed by the Appropriation (2019) Bill  and the Finance (No. 3) Bill: 

  • The Estimates of Expenditure  All allocations except for that of Parliament [Vote 2] were approved without debate.  Parliament’s allocation [$101 million, just over half the $163 million it had originally requested from the Minister] was condemned and challenged across the party political divide.  MPs threatened that unless Parliament was allocated what it had asked for, they would refuse to pass the Estimates as a whole.  Eventually, after much discussion and a half-hour suspension of business to allow parties to caucus, the Minister agreed that the allocation be increased to $145 million, with a corresponding reduction of the vote for his own Ministry’s unallocated reserve.  This left the Minister’s proposed total approved expenditure under all votes unchanged.
  • Appropriation (2019) Bill   Immediately after approval of the Estimates, the Minister presented this Bill to allow withdrawals from the Consolidated Revenue Fund in accordance with the Estimates.  The Bill was then referred to the PLC, which promptly returned a non-adverse report, allowing the Bill to proceed.  The House eventually passed the Bill with amendments to give effect to the increase in Parliament’s vote, early on Friday morning after the lengthy Committee Stage of the Finance (No. 3) Bill.
  • Finance (No. 3) Bill  The Second Reading of the Bill was a formality, given the comprehensive Budget debate that had preceded its introduction.  Its Committee Stage, however, was another matter, and took a long time.  The Minister moved a number of minor amendments, correcting obvious errors; these were quickly approved.  He also moved substantive amendments:
  • Deletion of clauses allowing customs officers additional powers to search private residences [clause 23]  After strong objections from Hon Biti and Hon Phulu, the Minister withdrew this clause, conceding that customs officers’ existing powers of entry and search were adequate.
  • Modification of clause 28 [new Standard Scale of Fines]  Opposition MPs were happy  with the new levels 1, 2 and 3, but  criticised the proposed new levels 4 to 14 as excessive, suggesting that they be halved, which would still allow courts to impose higher fines for offences than they can at present.  The Minister accepted the suggestion and the clause was amended.  Note: When and if the new scale of fines eventually becomes law, one effect will be that police will be able to be invite motorists to pay “spot fines” of up to the new level  3, which is to be $60 [sixty dollars].    
  • Deletion of clause 34 confirming Presidential Powers Regulations on Unexplained Wealth Orders  This clause provided for the re-enactment by Act of Parliament of the temporary provisions for Unexplained Wealth Orders enacted under the Presidential Powers (Temporary Measures) Act by SI 246/2018 of 9th November.  Hon Biti [entirely correctly] pointed out it was fundamentally wrong for a Finance Bill to include clauses having nothing to do with revenue matters.  The Minister of Justice, Legal and Parliamentary Affairs intervened to concede Hon Biti was right, and Minister Ncube accepted the deletion of the clause and said a separate Bill would be introduced to confirm the SI.  Note: SI 246 will expire at midnight on 8th May 2018, if not confirmed before then by Parliament.
  • Addition of new clause 37 providing for gratuities for former MPs not qualifying for pensions.

Clause 4, providing for the Intermediated Money Transfer Tax, was put to the vote and approved by 80 votes to 26.

The amendments to the Bill were quickly cleared by a non-adverse report from the PLC and the Bill was then passed and formally transmitted to the already-adjourned Senate, along with the Appropriation (2019) Bill.   

Note: Also on Thursday, the Minister withdrew the Finance (No. 2) Bill [hastily gazetted in October with the object of confirming the controversial increase to the Intermediated Money Transfer Tax, but not previously dealt with by Parliament].  This Bill had become redundant, because the approved Finance (No. 3) Bill contained overlapping clauses to confirm the changes and extend the existing exemptions from the tax.  

Senate

Senators had an easy week.  They debated their own motions on Tuesday and Wednesday. Four new motions were presented on Wednesday, raising the following issues: (1) the problem of siltation in the country’s rivers and dams; (2) the need to revive Kariba Town as a tourist centre by designating it a Special Economic Zone; (3) allegations of corruption in the Zimbabwe Cricket Board; and (4) the need to control veld fires.  The whole of Thursday’s brief sitting was spent on Question Time.  As the Senate’s adjournment to 29th January came before the National Assembly had passed the Appropriation (2019) Bill and the Finance (No. 3) Bill, there was no opportunity for Senators to consider these two Bills.  They will have to be dealt with by the Senate when it resumes sitting on 29th January.  

Budget Bills Are Not Yet Law – Despite Approval by National Assembly

Until the Parliamentary proceedings are completed, the two Budget Bills – the Appropriation (2019) Bill and the Finance (No. 3) Bill – cannot become law.  Like other Bills, they will only become legally effective when they have been dealt with by both Houses of Parliament, assented to and signed by the President, and gazetted as Acts of Parliament.    

As far as the Appropriation (2019) Bill is concerned, a delay in its becoming law does not really matter, at least for the time being.  It does not automatically mean that Civil Service salaries cannot be paid and that Government departments must close down until the Bill has come into effect as an Act.  Section 306 of the Constitution [entitled Authorisation of expenditure in advance of appropriation] allows an Act of Parliament to give the President a limited power to authorise the withdrawal of money from the Consolidated Revenue Fund to meet expenditure to carry on the services of the Government until the end of April.  The Public Finance Management Act of 2009 [link] does that, in section 26 [entitled Issue of money to carry on government at beginning of each financial year].

As far as the Finance (No. 3) Bill is concerned, the delay in its becoming law does matter.  It will cause confusion [and already has] because certain provisions are stated to be “with effect from the 1st January 2019” – whereas the true position is that it is unlikely to become law until sometime in February at the earliest.  The Senate still has to meet and consider it.

Note: the Senate must consider “Money Bills”, but its powers are limited.  “Money Bills” are governed by a special procedure [Constitution, Fifth Schedule, paragraph 7].  If the Senate does not pass a Money Bill within eight sitting days, then the National Assembly can resolve to send it to the President without waiting any longer.  If the Senate wants amendments made to a Money Bill, however, it is empowered to recommend those amendments to the National Assembly, which must consider them but is not obliged to accept any of them.  If the National Assembly accepts an amendment, it can incorporate it in the Bill before it is sent to the President for signature.

Budgetary Measures in Statutory Instruments

Some came into force last year.  [See previous Bill Watches]

SI 252A/2018  – payment of customs duty in foreign currency on motor vehicles and some other goods [with effect from 23rd November, the day after the Budget presentation]

SI 259/2018 – increases  in duty on cigarettes etc. and fuel [with effect from 1st December]

SI 264/2018 – customs duty suspensions on sanitary wear, effective for one year from 1st December.  SI 265/2018 provides for a corresponding suspension of VAT import tax.

Coming into Force on 1st January 2019

Suspensions of customs duty

SI 279/2018 provides for suspensions of duty with effect from 1st January 2019.  The existing suspension for vehicles and other goods for use by physically handicapped persons is extended.  Also provided for under tight controls, and generally limited to officially approved beneficiaries, are suspensions of duty on: imports of powdered milk, fertilisers, raw wine, luxury buses, fertilised poultry eggs, public service buses, buses imported by tour operators.  

Manufacturers’ rebates on customs duty with effect from 1st January 2019

SI 275/2018 [link] – new rebate for baking industry manufacturers

SI 276/2018 amendments  to existing rebate for furniture manufacturers

SI 277/2018 – amendments  to existing rebate for clothing manufacturers   

SI 278/2018 – amendments to existing rebate for pharmaceutical manufacturers.

VAT relief on exports of unbeneficiated hides

SI 274/2018 [link]  – with effect from 1st January 2019 for a period of twelve months and for the benefit of registered merchants specified in the statutory instrument only.

Other Statutory Instruments

Income tax and VAT exemptions for Chinese company

SI 272 and 273/2018 – tax exemptions for China Jiangsu ETCC, backdated to April 2012, in respect of the company’s activities in relation to the development of the Victoria Falls International Airport.  [Whatever the reason for this – it is unacceptable practice to back date laws.]

Civil Aviation – regulations controlling use of drones

SI 271/2018 [link] – Civil Aviation (Remotely Piloted Aircraft) Regulations, 2018. 

 

 

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