Harare(New Ziana) – The government said on Thursday it will pay bonus to all civil servants at once this month, and not stagger the payment over months as in previous years.
Presenting the 2020 National Budget Statement in Parliament, Finance and Economic Development Minister Prof Mthuli Ncube said payment of bonuses within one month will help cushion civil servants from the prevailing inflationary environment.
The prevailing inflationary environment has been eroding incomes fast.
“Government is committed to ensuring a decent standard of living for its public servants, and will take into account inflationary developments in the ongoing cost of living adjustment wage negotiations.
“Treasury has made arrangements to pay all civil servants their bonuses in November 2019. The bonuses are based on a formula that is inclusive of transport and housing allowances which is a once off variation to current policy, which base these payments to basic salary only.
“This was designed to bring relief to public servants in light of the erosion of disposable incomes under the current high inflationary environment,” he said.
Estimated at over 200 000, the size of the civil service has seen government finding it increasingly difficult to meet employment costs, especially bonuses.
Prof. Ncube also proposed to increase the tax- free income threshold for low- income earners from ZWL$700 to ZWL$2 000, in view of the inflation-induced rise in the cost of living.
“I propose to review the tax- free threshold from ZWL$700 to ZWL$2 000 per month and adjust the tax bands to begin at ZWL$2 0001 and end at ZWL$50 000, above which the highest marginal tax rate of 40 percent, in line with economic developments, with effect from 1 January 2020.
“I further propose to review the tax free bonus from ZWL$ 1 000 to ZWL$5 000, with effect from 1 November, 2019,” said Prof Ncube.