TAX RELIEF MEASURES
In this Covid 19 period, the government of Zimbabwe has not introduced any tax relief measures than already is in the 2020 budget. The budget is already constraint due to a paraphernalia of issues which demand the revenue collected. Hence the article will highlight some of the tax relief measure that were effected beginning January 2020.
CONCERNING CORPORATE TAX:
- As of 1 January 2020, the corporate income tax, a fringe lessening of the corporate tax rate from 25% to 24% was effected but Aids Levy remains at 3% of tax. Withholding tax on non-executive director’s fees has been to be final tax and not subject to a claimable tax credit. Zimbabwe currently functions on a source-based tax system that is to say income from a source within, or deemed to be within, Zimbabwe will be subject to tax in Zimbabwe except a particular exemption is available.
CONCERNING VAT:
- A value-added tax (VAT) is tax placed on a product or service when its value is added during the the supply chain, from production to the consumption. A borderline decrease of the VAT standard tax rate from 15% to 14.5% was effected commencing 1 January 2020. VAT registration threshold was increased from ZWL60,000 to ZWL1,000,000 for those who wish to be VAT agents.
CONCERNING THE INTERMEDIATED MONEY TRANSFER TAX (IMTT):
- Tax-free threshold increased from ZWL20 to ZWL100
CONCERNING PERSONAL TAX:
- Any employee in Zimbabwe who earns compensation in a currency other than that of Zimbabwe dollar is obligated to pay tax in foreign currency. When an employee receives remuneration partly foreign currency or partly in Zimbabwe dollars, such taxable income will be subject to PAYE using the PAYE tables, it is apportioned and converted accordingly. The 2020 budget seems to have come up with relief for taxpayers as the tax-free threshold has been reviewed upwards from ZWL $700 to ZWL $2 000 from 1 January 2020. On bonuses, the tax threshold has been reviewed upwards also from ZWL $1 000 to ZWL $5 000