ZIMBABWE today enters 2024 amid expectation of a brighter year than its predecessor. There are key events that are likely to shape the year. NewsDay Business gives a rundown of events or developments that will highlight 2024.
DMTT
Zimbabwe will begin collecting the domestic minimum top-up tax (DMTT) with effect from January 1, 2024.
DMTT is part of the Global Anti-Base Erosion (GloBE) rules which aim to ensure that all the global profits of large multinational entities are taxed at a minimum corporate income tax rate of 15%.
Under the GloBE rules, where a tax incentive results in an effective rate of less than 15%, another tax jurisdiction, usually where the multinational is headquartered, will collect the difference between the effective tax under the tax incentive and the minimum effective rate of 15% (the top-up tax).
In his 2024 national budget, Finance minister Mthuli Ncube said he would enact rules for Zimbabwe to start collecting the tax.
It is estimated that DMTT will unlock over US$200 billion in tax revenue for developing countries.
CoM2024
- Zim wins right to host UN flagship event
- DMTT long overdue
- What to watch out for in 2024
- A vote of confidence
Keep Reading
Zimbabwe will host the 56th session of the UN Economic Commission for Africa (ECA) Conference of African Ministers of Finance, Planning and Economic Development (CoM2024). The conference will run from February 28 to March 5 in Victoria Falls.
It will be the second time in 14 years that southern Africa has hosted the UN’s flagship event after Malawi hosted ECA’s flagship event in 2010.
The conference brings together African ministers of Finance, Planning and Economic Development, experts and players in civil society to delve into pressing issues confronting the continent and proffer solutions.
Zimbabwe’s hosting of the conference dovetails with its plans to grow the tourism sector by tapping into the meetings, incentives, conferences and exhibition (MICE) tourism.
The National Tourism Recovery and Growth Strategy has placed the promotion of MICE tourism as an integral component of the tourism recovery plan.
“The hosting of MICE activities such as conferences, events, fairs and festivals has the potential to bring people and businesses together, thereby building trust and boosting confidence in the destination. Engagement will be made with the relevant organisations that had cancelled or postponed scheduled international conferences to have them reconvened in the future,” the document said.
Mushayavanhu’s maiden statement
John Mushayavanhu takes over the reins as Reserve Bank of Zimbabwe governor with effect from May 1, 2024. The market will be keen to get a glimpse of his thrust. Will he continue with the tight monetary policy thrust? What will be the fate of gold coins and gold-backed digital tokens which the International Monetary Fund is against as it favours the introduction of “interest bearing assets”.
Another IMF supervised economic reform plan
IMF is ready to support Zimbabwe in its supervised economic reform plan. The staff-monitored programme was billed to start in 2023 and will happen this year.
Arrears clearance plan
Zimbabwe last year held high level meetings with creditors as it sought to resolve its external debt. As part of the housekeeping issues, Zimbabwe undertook economic and governance reforms and promised to compensate former commercial white farmers.
Fiscal and monetary authorities have undertaken several economic reforms. The wheels have been slow on governance reforms. Zimbabwe’s commitment to undertake reforms was predicated on the holding of free and fair elections. Election observer missions have said the August 23 and 24 elections failed to meet regional and international benchmarks on the holding of a free and fair poll.
Is the plan still on track?
New taxes
In his 2024 national budget Ncube announced a raft of taxes that begin today to mobilise additional revenue to meet growing needs.
These include the US$0,02 per gramme of sugar contained in beverages, excluding water, with effect from today. The Treasury chief said the sugar tax would be used to fund the health sector. A 1% wealth tax on properties worth above US$250 000 will be introduced with effect from this month.
CBZ/ZB merger
CBZ Holdings has appointed business executive Luxon Zembe to lead the merger of the financial services concern and ZB Financial Holdings Limited. The merger will create a strong financial services group with interest in banking, insurance, asset management, property and agriculture.
The merger comes after CBZ in September completed the acquisition of a 31,22% in First Mutual Holdings Limited (FMHL). The acquisition took its shareholding to 36,22% in FMHL, as it sought to strengthen its balance sheet through mergers and acquisitions.
