Zimbabwe: Mthuli Tightens Tax Grip As He Delivers $421.6 Billion Budget

(file photo).
26 November 2020

FINANCE Minister Mthuli Ncube Thursday moved to widen governments tax collection nets as he delivered his $421.6 billion budget for 2021 which will see new tax measures being applied on Small to Medium Enterprises (SMEs) and self-employed professionals among others.

Delivered under the theme "Building Resilience and Sustainable Economic Recovery", the blueprint envisages the economy to rebound by 7.4% in 2021 from consecutive 2-year downturn, ensuring strong economic recovery building on the milestones from the Transitional Stabilisation Programme (TSP) and targeting additional support measures to cushion vulnerable households.

A projected 150 000 formal jobs are expected to be recovered after having been lost due to Covid-19 pandemic.

Among some major highlights, the Office of the President and Cabinet received an allocation of $14.26 billion, parliament of Zimbabwe $7.1 billion, Public Service labour and social welfare $6.9 billion, Defence and War Veterans $23.7 billion , Industry and Commerce $2.3 billion.

Health Ministry was allotted $54.7 billion, Primary and Secondary Education Ministry received $55.2 billion and Higher education Ministry got $14.3 billion.

A projected 150 000 formal jobs are expected to be recovered after having been lost due to Covid-19 pandemic.

Among some major highlights, the Office of the President and Cabinet received an allocation of $14.26 billion, parliament of Zimbabwe $7.1 billion, Public Service labour and social welfare $6.9 billion, Defence and War Veterans $23.7 billion , Industry and Commerce $2.3 billion.

The Health Ministry was allotted $54.7 billion, Primary and Secondary Education $55.2 billion and Higher education $14.3 billion.

The Agriculture Ministry received $46.2 billion, Mines and Mining Development $1.3 billion, Environment and Tourism $1.7 billion, among other key allocations.

Ncube tightened the tax grip effecting an upward review of the Pay As You Earn Tax free threshold from $5000 to $10 000.

The Intermediated Mobile Money Transfer Tax commonly referred to as the 2 % tax free threshold was increased from $300 to $500.

The Youth Employment Tax Credit was increased from $500 to $1500 while the Forex Corporate Tax payments to take into account RBZ prescribed retention or liquidation thresholds was also increased.

An upward review of the bonus Tax-Free Threshold was effected from $5 000 to $25 000 effective 1 November 2020.

The treasury boss introduced a simplified tax regime for self-employed professionals while increasing presumptive tax to reflect market fundamentals alongside the introduction of a Cannabis Levy, chargeable on the value of exports, at varied rates ranging from 10 to 20% in line with the level of processing.

Excise Duty on Tobacco and Alcoholic Beverages alignment of taxes on fuel (Petrol & Diesel) were also effected.

Property owners were also directed to collect US$30 per every partitioned space used by SMEs in running their businesses.

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