Tax-free thresholds reviewed upwards

Source: Tax-free thresholds reviewed upwards – #Asakhe – CITE

The government has revised upwards the tax-free thresholds, a development set to cushion many Zimbabweans whose earnings continue to be eroded by the country’s ever-increasing inflation and the weakening local currency.

Presenting the 2022 national budget in Parliament Thursday, Finance and Economic Development Minister, Mthuli Ncube under tax relief measures increases the free thresholds for personal income, bonuses and retrenchment packages.

“In order to provide relief to taxpayers and also boost aggregate demand for goods and services, I propose to adjust the tax-free threshold from ZWL10 000 to ZWL$25 000 and also adjust the tax bands to end at ZWL$500 000, above which a marginal tax rate of 40% will apply, with effect from 1 January 2022,” said Ncube.

“I, further, propose to review the tax-free threshold on income accruing in foreign currency from US$70 to US$100 with effect from 1 January 2022. Other foreign currency tax bands remain unchanged.”

On the bonus tax-free threshold, Ncube said: “I also propose to review the local currency tax-free bonus threshold from ZWL$25 000 to ZWL$100 000 and the foreign currency tax-free bonus threshold from US$320 to US$700, with effect from 1 November 2021.”

The Finance Minister said the government recognises that a number of employees have been retrenched as employers adopt cost rationalisation strategies, in response to the negative effects of the COVID-19 pandemic.

“In order to preserve the value of retrenchment packages, I propose to review the non-taxable portion of the local currency tax-free threshold from the greater of ZW$L50 000 or 1/3 of the retrenchment package, whichever is higher, up to a maximum of ZWL$240 000, to the greater of ZWL400 000 or 1/3 of the retrenchment package, whichever is greater, up to a maximum of ZWL$2 million, for income earned in local currency. This measure takes effect from 1 January 2021.”