Harare, (New Ziana)- Finance and Economic Development Minister Prof Mthuli Ncube on Thursday doubled the tax-free income threshold from ZWL$5 000 to ZWL$10 000 as part of efforts to improve disposable incomes.
Presenting the 2021 National Budget statement, Prof Ncube said the upward review of tax-free income threshold was made in view of the recent salary and wage reviews for both public and private sector workers.
“Government remains committed to improving workers’ disposable income as part of the broader agenda to increase aggregate demand and savings. The recent salary and wage adjustments for public and some private sector employees necessitate a corresponding review in the personal income tax framework.
“I, therefore, propose to review the Tax-Free threshold from ZWL$5 000 per month to ZWL$10 000 per month. I further, propose to adjust the tax bands to begin at ZWL$10 001 and end at ZWL$250 000 per month, above which the highest marginal tax rate of 40 percent will apply.
“The above measures are effective from 1 January 2021,” he said.
Prof Ncube also proposed to review upwards, the tax-free threshold on bonus from ZWL$5 000 to ZWL$25 000, with effect from 1 November 2020.
The government recently increased public sector salaries by 40 percent effective from November 1 this year as part of continued efforts to improve conditions of service for civil servants.
The latest increase will see the lowest paid civil servant earning $14 528 while the basic salary for a teacher is now $18 237 per month.