THE Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU) has applauded the government for converting the COVID-19 and cushioning allowances to pensionable emoluments, as it will allow pensions to be paid in foreign currency.
In presenting the ZWL$58,2 trillion 2024 national budget last week, Finance, Economic Development and Investment Promotion minister Mthuli Ncube said the COVID-19 and cushioning allowance aggregating US$300 would be part of the pensionable emoluments across the board, effective January 2024, meaning that this money is now taxable which will reduce civil servant disposable incomes.
“As far as we see it, it is us who requested that. We made a call for that, we requested that the US$300 becomes a salary and the Zimbabwe dollar becomes the allowance so that at least people can save some pension money because those that are getting pension today are getting RTGS (Zimdollars) and you never really know the value,” ZCPSTU spokesperson, David Dzatsunga told NewsDay Business.
“By the time you get it, sometimes it won’t be valuable and fair for someone who had worked for 30 years. To raise the value of pensions, we said that part of the pension money will be in United States dollars, so it was really something we had been grappling for.”
Before, the US$300 COVID-19 and cushioning allowances were not subjected to taxation since they were allowances.
But, since they will now be included as wages, they are now taxable at a time when the tax-free threshold of ZWL$750 000 will not apply since public workers are earning significantly over the limit.
“We have been collecting bills in RTGS (Zimdollars) even for the unions. We have been also collecting bills in RTGS. Unions are dying, but they are the hens that lay the egg,” Dzatsunga said.
Ncube said civil servants played a pivotal role in public service delivery and their commitment to duty was critical to the achievement of national objectives.
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“The remuneration costs of government employees constitute a major cost to overall fiscal expenditures.
“Decisions on the public service pay framework for 2024, which are still subject to negotiations with worker representatives, will cover the review of monetary and non-monetary benefits for civil servants,” the minister said, explaining why he agreed with the council.
“Taking account of the constrains facing the economy, the outcome of this engagement must strike a balance between fair compensation for employees to meet their basic needs and affordability considerations, also taking account of the need to upscale staffing levels for critical sectors such as education and health, among other issues.”
Zimbabwe has between 300 000 and 400 000 civil servants.
