[Bill-Watch] Bill Watch 36/2014 of 22nd September [Fiscal Policy Review Debate, Finance (No 2) Bill and Sovereign Wealth Fund Bill]

[Veritas Bill Watch]

BILL WATCH 36/2014
[22nd September 2014]
Mid Term Fiscal Policy Review Debate, Finance (No. 2) Bill, 
Sovereign Wealth Fund of Zimbabwe Bill 
Mid Term Fiscal Policy Review 
Item No. 1 on Tuesday's National Assembly agenda is the debate on "the
adjourned motion that leave be granted to bring in a Finance Bill".  This is
Parliament-speak for the debate on the Mid-Year Fiscal Policy Review
Statement presented by the Minister of Finance and Economic Development on
11th September.  If the motion is approved, and if all goes according to
plan, the National Assembly will then pass the Finance (No. 2) Bill through
all its stages and send it to the Senate to be passed by the Senate before
the end of the week.  The Minister's aim is probably to have the Bill
gazetted and in force as an Act on or before the 1st October, the effective
date of some of the tax measures that it contains.  [Both the Fiscal Policy
Review Statement and the Ministry of Finance and Economic Development's
departmental draft of the Bill are available from the addresses specified at
the end of this bulletin.  Also available is the Monetary Policy Statement
issued by the Governor of the Reserve Bank of Zimbabwe on 25th August, which
the Minister described as complementing his Fiscal Policy Review.]
Note:  Commencement of the debate on the Fiscal Policy Review was delayed by
a procedural defect, which was identified by the Speaker in a formal ruling
when the National Assembly met on Tuesday 16th September.  In his ruling the
Speaker said that the Minister had not followed the correct procedure: he
had simply made his statement, without moving a motion to the effect that he
be given leave to bring in a Bill to make provision for the revenue and
public funds of Zimbabwe. i.e., a Finance Bill.  The proceedings so far,
said the Speaker, were therefore unconstitutional, not in compliance with
Standing Orders, and null and void.  [Full text of Speaker's ruling
available from the addresses given at the end of this bulletin.]  This
stopped proceedings temporarily.  The next day the Minister admitted his
mistake, apologised to the National Assembly and asked it to condone the
defect and deem the necessary motion to have been moved.  After discussion,
during which MDC-T MPs thoroughly enjoyed taking the Minister to task for
his lapse, the House approved his request by a show of hands.  This cleared
the way for the coming debate.  
Comment:  The Minister may have acted in breach of Standing Orders and
Parliamentary practice, but the Speaker's characterisation of the Minister's
lapse as "unconstitutional" can also be criticised.  The Speaker justified
it by citing section 305(5) of the Constitution, but that provision refers
only to an Appropriation Bill to make additional or supplementary
allocations for expenditure, not to a Finance Bill such as the present Bill,
which is intended to adjust the tax laws in an effort to raise funds to meet
expenditure on appropriations authorised by Parliament at the beginning of
the year. 
Finance (No. 2) Bill
This Bill will be introduced by the Minister of Finance and Economic
Development if, after debating the Mid-Term Fiscal Policy Review, the
National Assembly approves his motion seeking leave to bring in the Bill.
The Bill is designed to bring into effect those changes to the taxation
laws, as proposed by the Minister in the Fiscal Policy Review, that require
approval by Parliament.   One of the Minister's measures has already been
implemented by statutory instrument; this is the increase in the excise duty
on petrol and diesel, which was brought into effect by SI 140/2014 with
effect from the 12th September, the day after presentation of the Fiscal
Policy Review.
Among the matters to be provided for in the Bill are:
.        reduction from 7% to 5% of the royalty that must be withheld from
gold producers on gross proceeds realised by licensed gold buyers
.        levying of excise duty on airtime
.        penalties to be paid by the contractors and withholding agents of
non-resident  performing artistes, for failure to withhold or make over the
required 15% withholding tax on the gross fees of those artistes
.        correction an error in the definition section of the Value Added
Tax Act which defines the term "fiscalised electronic register" in two
different ways.
.        measures to ensure compliance by employers with their obligation to
withhold PAYE on fringe benefits for employees.
Sovereign Wealth Fund of Zimbabwe Bill
This Bill was transmitted to the Senate on 17th September after its belated
approval by the National Assembly.  Readers may recall that the Bill lay
dormant for five months after its Second Reading in the National Assembly at
the end of March.  The delay may have been caused by the Minister of Finance
and Economic Development's decision to make further changes to the original
Bill in addition to those already announced in March.
Amendments made on 3rd September  Having given one day's notice of these
further amendments, the Minister took the Bill through its Committee Stage
on 3rd September.  He withdrew one of the amendments he had put on the Order
Paper and secured the National Assembly's approval of the remainder.  There
was no debate or dissension.  The Bill therefore passed its Committee Stage
with amendments to a number of the original clauses and several new clauses.
[Text of Bill as amended, with amendments highlighted and with explanatory
notes by Veritas, available from the addresses given at the end of this
bulletin.]
Banking law amendments  Among the changes made on 3rd September was the
addition to the Bill of two new clauses affecting banking law.  The new
clause 32 adds the Small and Medium Enterprises Development Corporation to
the list of institutions to which the Banking Act does not apply.  The new
clause 33 amends the Reserve Bank Act:
.        to allow the Reserve Bank to open credits and issue guarantees
.        to remove existing restraints on the Reserve Bank's power to borrow
foreign currency [the consent of the Minister will still be necessary]  
.        to provide that if, when there are two Deputy Governors, there is a
vacancy in the office of Governor, the Acting Governor will be a Deputy
Governor appointed by the Minister with the approval of the President [the
current provision requires the Deputy Governors to act on a rotational
basis].
As neither of these amendments is in any way related to the Sovereign Wealth
Fund; an appropriate amendment to the Bill's long title should also have
been put to and approved by the National Assembly.  The omission should be
corrected in the Senate.  
The amended Bill was immediately referred to the Parliamentary Legal
Committee [PLC] as required by the Constitution.  The PLC returned a
non-adverse report on 16th September, and the Bill, as amended, was duly
passed by the National Assembly on 17th September and transmitted to the
Senate.  1
Correction to Bill Watch 34/2014   In a preliminary note on the Committee
Stage amendments to the Sovereign Wealth Fund of Zimbabwe Bill, Bill Watch
34/2014 of 9th September incorrectly stated that the original clause 30 of
the Bill had been deleted from the Bill by one of the amendments.  In fact,
the clause was not deleted; the proposal to delete was the amendment that
the Minister withdrew.  This means that the clause, now renumbered as clause
31, is still in the Bill; it enacts a new version of section 33 of the
Zimbabwe Mining Development Corporation Act dealing with special dividends
on the sale of diamonds;  this new version will take the place of the
section inserted in the ZMDC Act by the Finance Act [Act No. 1/2014].
Government Gazette
[items not available from Veritas unless otherwise stated]
Statutory Instrument dated 5th September
Company law  SI 137/2014 enacts a new Fifth Table [Liquidator's Fees] for
the Seventh Schedule to the Companies Act.
Statutory instruments dated 12th September
Excise duty on petrol and diesel  SI 140/2014 provides for the increased
excise duty on petrol, both leaded and unleaded, and diesel, with effect
from 12th September, as announced in the Mid-Year Fiscal Policy Review
Statement by the Minister of Finance and Economic Development.  
Collective bargaining agreements  SI 138/2014 affects the Plastic
Manufacturing Industry, SI 139/2014 the Battery Manufacturing Industry.
Statutory Instruments dated 19th September
Social workers  SI 141/2014 is a set of regulations made by the Minister of
Public Service, Labour and Social Welfare that lay down the procedure for
electing members of the Council of Social Workers under the Social Workers
Act.  
Collective bargaining agreement  SI 142/2014 affects the Furniture
Manufacturing Industry.
 
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