Less fines, more pro-business reforms please

Source: Less fines, more pro-business reforms please | The Herald March 31, 2017

Christopher Farai Charamba Correspondent
Sometime last month, one of those entertaining videos went viral on the social media.

In this particular clip, a Zimbabwe Republic Police traffic officer was at pains to explain to an individual of Asian origin, perhaps Chinese, that his vehicle should have two fire extinguishers, a spare wheel and a jack.

“Do you have money or we can impound the vehicle?” the officer asks. “We can go to the police station and you can look around for money to pay the fine.”

“Which money?” queries the confused Asian individual holding the camera which is recording the scene.

“The money for the insecure fitting of the lamp,” replies the officer.

“Money for the sellotape?” questions the Asian man.

“My friend do you understand what I am trying to say?” asks the officer.

The two continue this back and forth exchange for the next couple of minutes, the officer trying to explain that the man is being fined for insecure fittings of a lamp and for not having a second fire extinguisher.

The Asian man confesses that he does not understand what the officer is saying to him.

The scene ends with the officer telling the man to wait as he walks away, perhaps to find someone who can better communicate the individual’s offence.

If this had not been somewhat clandestinely recorded on a mobile device and a familiar situation, one would have thought it to be a comedy scene out of an upcoming film or series.

Alas, this is a reality that many Zimbabweans and tourists find themselves in when they are stopped at the many roadblocks on the roads.

The mere mention of the word police or roadblock is likely to be met with disdain as motorists recall the various situations they have had to lose their hard-earned dollars to settle a traffic fine.

And now those traffic fines have gone up. Level One fines which were previously pegged at $5 are now $10 and Level Two and Three fines have gone up from $10 and $15 to $20 and $30, respectively.

This will only bring more misery on cash-strapped motorists particularly in a situation where getting money from the bank remains a challenge.

One can all but guarantee that the pronouncement will be met with increased verve from the police which will see more roadblocks on the roads.

The increase in traffic fines follows the signing into law of the Finance Act last week.

Section 35 of the Finance Act reviewed Levels One, Two and Three of the standard scale of fines in the Criminal Law Code with effect from January 1, 2017.

Finance Minister Patrick Chinamasa argued that the road traffic fines were meant to deter criminal behaviour and the current standard scale of fines which was last reviewed in 2009 had failed to promote safety and discipline on the roads.

But this is unlikely to be the case. The increased fines will most probably lead to increased harassment of motorists by the police and probably fuel corruption where motorists offer to pay a less amount directly to the cop to be let off.

A large amount of indiscipline on the road is also committed by illegal pirate taxis known as “mushikashika”, which both the police and the city councils have failed to get rid of.

Some quarters allege that these pirate taxis belong to police officers and that is why they have been given free rein on the roads.

The increase in traffic fines is tantamount to rent seeking behaviour where the citizen pays the cost without reciprocal benefit in the society or wealth creation.

Roadblocks are already said to be a major bother to tourists and deter a sizeable number of them from wanting to return to the country.

A Visitor Exit Survey commissioned by the Tourism Minister Walter Mzembi (pictured above) and carried out by ZimStat polled 38 680 foreign tourists over a 12-month period between 2015 and November 2016.

At 43,2 percent, harassment by police was the major reason not to recommend the country to potential tourists.

Minister Mzembi himself confirmed this in a recent BBC HardTALK interview where he said: “One of the issues that they (tourists) clearly pointed out that was completely undesirable was the inordinate incidence of roadblocks and their frequency on our highways and roads leading to tourist destinations.”

He would add: “I am not an advocate of unintelligent taxation. I believe that we should grow the cake sufficiently enough to a point where we tax it in smaller numbers but we tax a bigger portion.”

One certainly agrees with Minister Mzembi. There is no long-term gain in what he dubs “unintelligent taxation” is concerned, and one would argue an increase in traffic fines falls into this category.

So, too, does the tax on hair salons, commuter operators and informal cross-border traders which came into effect with the same Finance Act of 2017 which increased fines.

Instead of Government taxing the last dollar out of its people, efforts need to be put towards growing the economy by extending support to the informal sector and small to medium enterprises where a number of people are employed, as well as improving the ease of doing business in the country.

According to the World Bank’s Doing Business index, Zimbabwe has dropped four places from 157 in 2016 to 161 in 2017 out of 190 countries in terms of ease of doing business.

Starting a business in Zimbabwe takes an average of 91 days, which is 64 days longer than the sub-Saharan Africa average of 27 days.

These are issues highlighted also in the Zimbabwe National Competitiveness Report for 2015 which compares the cost and ease of doing business in Zimbabwe with countries in the region.

It highlighted issues such as the fact that if one wanted to build a factory for a $100 million project in Zimbabwe they would have to pay on average 1,5 percent of the project cost, $1,5 million, to get an Environmental Management Authority clearance.

The same environmental clearance costs $150 000 in neighbouring Zambia, R10 000 in South Africa, R10 000 and 0,2 percent of the cost, $200 000, in Mozambique.

Industrial users in Harare pay a fixed water charge of $80 whereas their counterparts in Lusaka, Zambia, pay $2 which is 40 times less than the amount paid in Harare.

There are a number of other such barriers to entry in the local business sector which deter both foreign and, more importantly, local investors.

Focus should be on correcting these issues, not taxing and fining motorists. Fixing the ease and cost of doing business will serve to grow the proverbial cake that Minister Mzembi referred to and have a lasting positive effect on the economy.

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