'Income taxes in Zimbabwe will have
to rise by 8 percentage points to
compensate for lost customs revenue'
HESITANT STEPS are being taken towards a free-trade zone in the Southern Africa Development Community, of which South Africa is the most prominent member.
Zimbabwe has been pushing the idea and had scheduled discussions for the end of the month. But, according to Eddie Cross, head of the industrial committee at the national confederation of industries, these might have to be postponed to the middle of February as some of the 14 nations involved have not ratified the agreement.
Cross says that talks between South Africa and Zimbabwe on freer trade between the two countries will still go ahead on January 25.
The possibility of this happening is not rated highly by Zimbabwe's private sector. The confederation of industries has proposed that almost all products be exempted from duty. The most important of these are clothing and textiles, and observers in Harare say there is not the slightest prospect of South Africa agreeing.
But Zimbabwe has its own concerns over free trade. A study by a private consulting firm, Imani Development, says that income taxes in Zimbabwe will have to rise by as much as 8 percentage points to compensate for lost customs revenue. As the country is already one of the highest taxed in the world, there is little chance of this being adopted, particularly as the economy is already in crisis and the 14 million population is extremely unhappy with the government.
BY MARTIN RUSHMERE
