ZIMBABWE-Carbon-Tax Proposal Hits the Rock

ZIMBABWE-Carbon-Tax Proposal Hits the Rock
ZIMBABWE-Carbon-Tax Proposal Hits the Rock
  • The High Court of Zimbabwe has taken a U-turn on a tax policy implemented two years ago

The Zimbabwe-Carbon-Tax proposal as a drive to increase tax revenue has received a setback. This narrative is validated by a recent refusal from the High Court of Zimbabwe to endorse a new carbon tax on fuel.

The refusal also affected the redemption levy of the National Oil Company of Zimbabwe impose two years ago. The reason for this disapproval is explained thus by the High Court that the Tax cannot be levied by executive action through a statutory instrument but must go through a direct parliamentary process.

In summary, the latest judgement put forward by the Judicial arm of the nation relies on the constitutional limitation for the executive and the relevance of the parliamentary arm in enacting laws of such importance.

This judgement now halts the carbon tax introduced two years ago, precisely June 2020 by the Ministry of Finance and Economic Development using an instrument of the Finance Act.

Recall that the case got to the High Court as a result of a lawsuit initiated by a Mutare lawyer, Mr. Innocent Gones who sued the Finance and Economic Development Minister Professor Mthuli Ncube, accusing him of usurping Parliament’s powers through the promulgation of Statutory Instrument 123A of 2020 and 145 of 2020 that created the taxes in question.

ZIMBABWE-Carbon-Tax Proposal Hits the Rock
A closeup shot of the realistic flag of Zimbabwe with interesting textures

ZIMBABWE-Carbon-Tax: The High Court Submission

The judgement was presided upon by Justice Siyabona Msithu who rule that the provision for the carbon tax specifically in Section 3 (2) of the Finance Act was unconstitutional because it gave the Minister who is a member of the Executive Arm to adjudicate in a legislative business by amending Act of Parliament.

He set aside the Finance (Amendment of Sections 22E (1) and 22H of Finance Act) Regulations, 2020, published as SI 123A of 2020 and the Finance (Amendment of Sections 22E (1) and 22H of the Finance Act) Regulations, 2020, published as SI 145 of 2020

Furthermore, Justice Msithu argues that the Constitution did not permit the legislature to delegate legislative powers to subordinate bodies or authorities whose effect was to allow such subordinate bodies to repeal or amend Acts of Parliament

Africataxreview.com was able to gather views that defended the actions of the executive arm of government with the first coming from the very mastermind, Minister Ncube who denied acting against the dictates of the law.

Also, Mr J Bhudha from the Civil Division of the Attorney General, argued that Minister Ncube’s conduct in implementing the law could not amount to an abuse of his powers because the law permitted him to amend tax rates.

His argument hinges on the narrative that the amendment of tax rates became implemented through the instrument of Section 3 of the Finance Act.

Rather than the argument of making new laws, it has also been argued that the constitution especially sections in the Finance Act and the formulation of the country’s macro-economic policy allows a minister to amend any tax rate through regulation.

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