Harare, (New Ziana) – The government has revised up the tax-free salary threshold to ZWG 2 800 with effect from next January in a bid to increase income available to workers.
Presenting the ZWG276 billion 2025 national budget on Thursday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube said the tax-free threshold is in line with current legislation which exempts the first US$100 income earned by employees, with higher income taxed at rates ranging from 20% to 40% depending on the gross income.
“The equivalent exempt portion in local currency and the tax bands thereof have, however, been affected by the recent macroeconomic developments, hence, the need to provide relief to taxpayers. In view of the above, I propose to review the local currency Tax-Free Threshold to ZiG2 800 per month and accordingly adjust the tax bands with effect from 1 January 2025,” said Prof Ncube.
He proposed that marketable securities be subject to Capital Gains Withholding Tax at a rate of 1% on the gross value of the price at which the security is sold, with effect from 1 January 2025 in addition to the Withholding Tax being treated as a final tax. “Mr Speaker Sir, Government, under NDS1, endeavours to accelerate the implementation of an integrated power generation and transmission framework, which incorporates independent power producers, thus, enabling them to sell electricity through the national grid.
“Current legislation provides for VAT deferment on capital equipment imported by operators in agriculture, aviation, health, manufacturing and mining, which has assisted operators to manage cash flows after huge capital outlays,” said the Minister.
“Whereas Government has incentivised the above productive sectors, it is also important to provide the relief to the energy sector, which is a critical enabler of other productive sectors. I, thus, propose to extend the Facility to the Energy sector with effect from 1 January 2025.”
He proposed that Electric Motor Vehicles attract Customs Duty of 40%, whilst electric tractors, attract Duty at 0% while rebate of duty will be extended on equipment used for setting up Electrical Vehicle Solar Powered Charging Stations with effect from next January.
“Mr Speaker Sir, the Region is currently facing a deficit in electricity supply, which has led to prolonged load shedding. In that regard, Liquefied Petroleum Gas (LPG) has served as an alternative energy source, especially for cooking and heating during power outages.
“In addition, there has been a transition from traditional fuels such as firewood or charcoal, which are associated with indoor air pollution, deforestation and environmental degradation. “In order to reduce the cost of LPG, I propose to exempt the product from Value Added Tax, with effect from 1 January 2025,” he said.
New Ziana
