Zimbabwe taxes mobile phones, call time to boost state coffers

HARARE (Reuters) - Zimbabwe's finance minister announced taxes on mobile phones and on the charges for using them on Thursday and raised the levy on fuel in an increasingly desperate bid to boost state revenues in the face of stagnating domestic growth. Finance Minister Patrick Chinamasa said economic growth would be dragged down by weaker performances in the mining, tourism and manufacturing sectors, although he kept his 2014 forecast at 3.1 percent. The southern African country's economy has been squeezed by a lack of foreign investment, power shortages and company closures, all of which has hurt government finances. "The slowdown in performance is also reflected in reduced revenue collections, depressed exports and imports," Chinamasa said during a half-year budget statement to parliament. To raise more funds for a government that spends more than 70 percent of its budget on salaries, Chinamasa said the state would impose a 5 percent levy on making mobile phone voice calls and sending data. A new 25 percent duty will also be charged on all imports of mobile phones, while the levy on fuel was increased to finance "inescapable expenditure", he said. "Government faces a challenge to raise additional revenue to finance non-discretionary expenditure," Chinamasa said. In one bright spot, he said agriculture had rebounded this year, with Zimbabwe producing enough maize to feed itself for the first time since 2003 and a tobacco crop of 215 million kg. Chinamasa said the government planned to spend $252 million on free seed and fertiliser for 1.6 million rural farmers to boost maize production in the summer season that starts at the end of next month.