Tax-free Bonus Threshold Raised To $100 000

Finance and Economic Development Minister Mthuli Ncube has raised the local currency tax-free bonus threshold from ZWL$25 000 to ZWL$100 000.

Presenting the 2022 national budget statement in Parliament on Thursday afternoon, Ncube also announced an increase in the foreign currency tax-free bonus threshold from US$320 to US$700. Said Ncube:

I also propose to review the local currency tax-free bonus threshold from ZWL 25 000 to ZWL 100 000 and the foreign currency tax-free bonus threshold from US$ 320 to US$ 700, with effect from 1 November 2021.

Ncube also proposed to raise the excise duty on cigarettes, saying this will help to curb illicit flows and also mobilise additional revenue to the Fiscus. He said:

In order to benchmark excise tax rates with the practice in the region, thereby curbing illicit flows and also mobilise additional revenue to the Fiscus, I propose to increase excise duty on cigarettes from 20% + US$5.00/1000 cigarettes to 25% + US$5.00/1000.

I, further, propose to introduce a flat rate of excise duty on energy drinks at a rate of US$0.05/litre, or the local currency equivalent.

Incidences of non-communicable diseases, in particular, cancer, diabetes and hypertension are on the increase.

Ncube announced that with effect from 1 January 2022, the non-taxable portion of the local currency tax-free threshold of retrenchment packages will be adjusted. He said:

In order to preserve the value of retrenchment packages, I propose to review the non-taxable portion of the local currency tax-free threshold from the greater of ZWL50 000 or 1/3 of the retrenchment package, whichever is higher, up to a maximum of ZWL240 000, to the greater of ZWL400 000 or 1/3 of the retrenchment package, whichever is greater, up to a maximum of ZWL2 million, for income earned in local currency.

This measure takes effect from 1 January 2021 (sic).

Companies that employ people living with physical challenges will get a tax credit of US$50 or local currency equivalent per month per additional employee recruited. Said Ncube:

The NDS1 thrust is to protect vulnerable groups through new interventions and enhancement of existing programmes since people living with physical challenges face significant barriers to employment.

I, therefore, propose to introduce a tax credit of US$50 or local currency equivalent per additional employee recruited per month for corporates that employ physically challenged persons.

The credit will, however, be limited to a maximum of US$2 250 per year of assessment.

This measure takes effect from 1 January 2022.

More: Pindula News

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