FINANCE, Economic Development and Investment Promotion minister Mthuli Ncube has raised the monthly tax-free income tax threshold to about Zimbabwe Gold (ZiG)1 356.
After the Zimbabwe dollar (ZWL) had depreciated by 261,28% during the first quarter of the year, the ZWL was scrapped, and the ZiG was adopted as the new currency on April 5.
However, with this depreciation, it meant that the monthly tax-free income tax threshold, at ZWL750 000, translated to US$28,39 at the end of the quarter, way below the cost of living.
This drop was from the greenback Zimdollar equivalent of nearly US$74, at the end of January, when the tax-free income tax threshold of ZWL750 000 went into effect.
Following the conversion into the ZiG currency, Ncube on Friday issued Statutory Instrument (S.I.) 74 of 2024, stating that the monthly tax-free income tax threshold is ZiG1 356, about US$100. This figure was calculated from the figure of ZiG12 204 as stated in the SI covering the period April 5 2024 to December 31 2024.
In the schedule of the new income tax brackets, Ncube said those earning between ZiG12 204,01 to ZiG36 612, over the same period, would attract a 20% income tax.
Those earning between ZiG36 612,01 to ZiG122 040 will attract a 25% income tax, ZiG122 040,01 to ZiG244 080 (30%), ZiG244 080,01 to ZiG366 120 (35%), and ZiG366 120,01 and above (40%).
In monthly terms, this translates to between ZiG1 356,01 to ZiG4 068 for the 20% income tax, ZiG4 068,01 to ZiG13 650 (25%), ZiG13 650,01 to ZiG27 120 (30%), ZiG27 120,01 to ZiG40 680 (35%), and ZiG40 680,01 and above (40%).
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The monthly consumer statistics from the Zimbabwe National Statistics Agency are yet to be released to determine whether these new income tax brackets are in line with the cost of living.
