Zimbabwean Finance Minister Tendai Biti said 85% of his country's citizens were "drowning" in poverty.

Only 2% of the estimated 12million Zimbabweans could afford to eat "prawns", said Biti presenting his budget in Parliament.

He said the "barely floating" middle-class made up the remaining 13%.

Biti also revealed that his government was able to raise revenues of only about US$90-million a month from value-added tax, customs duty and taxes on individuals.

"The bulk of the money [63%] we have collected has gone to salaries for civil servants," said Biti.

"We have a problem, a structural problem."

The government needs more than US$2-billion to run ministries efficiently.

Since the unity government was formed in February, about US$20-million has been spent on foreign travel.

The cash shortage was exacerbated by the inability of the once-profitable mining sector, which has all but collapsed, to pay taxes. Biti said the mines were not declaring taxable profit.

He proposed a "tax review" that would prevent mines from deferring taxes.

In spite of the continuing farm invasions, Biti said he was placing his hopes on an improved agriculture season.

Improved earnings were also expected from mining and tourism.

He said gold mines were likely to raise production by about 14%.

Biti said the flat-rate wages for civil servants would be replaced by salary scales based on skills and seniority.

By The Times (SA)