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and emerging economic challenges.
The Parliament’s Budget, Finance and Investment Promotion Committee is holding public consultations and leading discussions on the Bill with the business community and people in general to get their input on the Bill before it is presented to Parliament for debate next Tuesday.
The committee has so far visited Mutare and would move to Masvingo and Bulawayo where residents are expected to give their own views on the new Income Tax Bill.
A report on the public consultations is expected to be presented to Parliament next week amid revelations that most people were not impressed by several clauses contained in the new Bill.
The Bill proposes a major shift from a source-based tax system to a residence-based tax system and a Harare-based tax expert said under this new system taxation would be done depending on whether the person was a resident, temporary resident or a non-resident for tax purposes.
Zimbabwean residents would be subject to tax on income and gains from anywhere in the world subject to an offset of the foreign tax paid.
Temporary residents would generally be liable to pay Zimbabwean tax on their worldwide income which is required to be remitted to Zimbabwe in terms of the Exchange Control Regulations and all income derived from a source in Zimbabwe.
A banker told The Herald that the new Bill was not ‘friendly’ to investment and business as it sought to punish Zimbabweans in the Diaspora who make important contributions to the economy through remittances.
“We need to review this Bill to prevent the flight of investment capital from the country,” he said.
“Certain aspects are quite good but the bulk to do with income sourced at home and abroad will certainly face stiff resistance.”
Commenting on the existing Income Tax laws, he said: “The laws have created a situation where some provisions are perfectly adequate and remain fit for the purpose, while others have been amended piecemeal,” he said.
Online Reporter