Mthuli Introduces Cannabis Levy, USD Fuel Excise Duty
Finance and Economic Development Minister Mthuli Ncube has proposed an array of taxes in his projected 2021 national budget.
Ncube has proposed to introduce a Cannabis Levy, which is chargeable on the value of exports at varied rates of tax that correspond to the level of the process.
The Levy is premised on the projection that the potential value of cannabis exports for medicinal purposes is estimated at US$1.25 billion next year.
According to the levy proposal, 10% will be charged on the export sales value of finished packaged medicinal cannabis oils that are ready for resale; 15% on the export sales values of bulk extracted medicinal cannabis oils that require further processing and/ or packaging; and 20% on the export sales value of dried medicinal cannabis flowers.
On presumptive taxes, that is, taxes levied on informal traders, Ncube proposed that self-employed professionals will now pay a presumptive tax ranging from $250 000 to $1 million a month effective January 1, 2021.
Medical professionals will pay $500 000, engineers $500 000, legal $500 000, architects $250 000 and realtors $1 million.
Ncube, however, said the presumptive tax will not apply to professionals who produce a valid Tax Clearance Certificate for the year of assessment.
On the fuel sector, Ncube said fuel excise duty will be paid in foreign currency unless the importer provides satisfactory documentary evidence to the effect that funds were sourced through the auction system.
To encourage the importation of fuel by pipeline, the Petroleum Importers’ Levy has been reviewed to USD$0.05 a litre on both diesel and petrol.
