Govt Raises Tax-free Income Tax Threshold
The Government has raised the monthly tax-free income tax threshold to about Zimbabwe Gold (ZiG)1 356.
This comes after the Zimbabwe dollar (ZWL), which was replaced by ZiG this month, had depreciated sharply during the first quarter of the year.
As reported by NewsDay, the depreciation 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 US dollar/Zim dollar equivalent of nearly US$74, at the end of January 2024, when the tax-free income tax threshold of ZWL750 000 came into effect.
On Friday, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, 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.
The S.I. says 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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