Zimbabwean Finance Minister Patrick Chinamasa on Thursday unveiled new individual and commercial tax measures as the government increasingly turns to taxation to prop up falling revenues and a declining economy.

Due to poor performance in key sectors of the economy, Zimbabwe’s economic growth forecast in 2014 has been cut to 3.1 percent from the initial 6.1 percent.

While agriculture, the mainstay of the economy had recorded positive growth in the first half of 2014, the minister noted that this growth would be insufficient to offset poor performance in such sectors as mining that were now expected to register negative growth, down from 10.7 percent initially forecast.

Presenting his mid-term fiscal policy review statement Thursday (download below), the minister said the slowdown in the economy was being reflected in reduced revenue collections and depressed exports and imports.

In the six months to June, the government missed its revenue targets by 6.1 percent after it collected 1.735 billion dollars against a target of 1.847 billion dollars.

Exports during the period stood at 1.2 billion dollars against imports of 3 billion dollars, resulting in a trade deficit of 1.8 billion dollars compared to 2.4 billion dollars over the same period in 2013.

The minister bemoaned that the influx of nonessential imported goods, most of which were being manufactured locally, continued to undermine growth of the agricultural sector and recovery in the local industry. Manufacturing capacity utilization is projected to decline to 30 percent in 2014, down from more than 50 percent in 2011.

The minister therefore raised duties on some imported products including poultry, beverages, dairy produce and vegetables.

To enhance government revenue, the minister proposed a number of measures that include taxing fringe benefits of employees and increasing by 0.5 U.S. cents excise duty on fuel with effect from next week.

The minister also introduced a five percent duty on airtime for both voice and data from next week and a 25 percent customs duty on imported mobile handsets with effect from next month.

Chinamasa proposed limited amnesty to all taxpayers who disclose their tax obligations from 2009 to the end of this month within a period of six months and also pay within a period of six months.

The amnesty takes effect at the beginning of next month. The amnesty comes as many Zimbabwe businesses are reportedly evading paying corporate tax due to the harsh macro-economic environment prevailing in the country.

To boost viability in the gold mining sector that is threatened with low international prices, the minister reduced royalty by big gold miners to 5 percent from 7 percent, and scrapped presumptive tax by small scale gold producers.

Meanwhile, the central bank governor John Mangudya told journalists in an interview after presentation of the fiscal policy statement that the measures announced by the minister would boost confidence in the economy as well as production in the mining and manufacturing sectors.

The import duties were also necessary to contain unnecessary products coming into Zimbabwe and this would promote food production in the country, the central bank governor said.

He also commended reduction in gold royalties as a positive move that will boost gold production.

On new tax measures, the central bank governor said these were necessary to keep the government and economy running.

“Tax measures, as usual, are necessary to increase government revenue. We need to increase taxation at the moment because it is necessary to ensure government can balance its books,” he said.

The new tax measures, in a country ranked among the most highly taxed in the world, are set to further put a strain on the majority of Zimbabweans who are struggling to make ends meet in the poor performing economy.

The increase in fuel excise duty, in particular, will have ripple effects in the economy as prices of most basic commodities will go up as a result of the increase in transport costs.

In an effort to normalize relations with international creditors, Chinamasa said the Zimbabwe government had started making token payments towards servicing its debts to multilateral creditors.

He said token amounts of 900,000 U.S. dollars, 1.8 million U.S. dollars and 1 million U.S. dollars had been paid to the IMF, World Bank and the African Development Bank during the first six months of this year.

Zimbabwe’s total external debt now stands at 8.8 billion U.S. dollars, including 121 million U.S. dollars owed to the IMF and 314 million U.S. dollars to the European Investment Bank.