Treasury Reviews Personal Income Tax Framework 

The Government of Zimbabwe which recently hiked salaries for civil servants by 41 percent has reviewed personal income tax framework.

Presenting the 2021 National Budget this Thursday, the Minister of Finance and Economic Development Professor Mthuli Ncube proposed a review of tax free threshold from ZW$ 5000 to ZW$ 10 000 per month.

“Mr Speaker Sir, 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 necessitates 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,” said Ncube.

The new tax framework which shall be effective 1 January 2021 will see the tax bands beginning at ZW$ 10 001 and end at ZW$ 250 000 above which a tax rate of 40% will apply.

He further proposed a review for the bonus tax free threshold from as little as ZW$ 5 000 to ZW$ 25 000.

“In addition, I propose to review upwards, the bonus Tax-Free Threshold from ZW$5 000 to ZW$25 000, with effect from 1 November 2020,” concluded on personal income tax Ncube.