adminZvamaida Murwira Senior Reporter
THE national lockdown has stalled tabling of the Finance Bill before Parliament, after the House was compelled to suspend business when two legislators and some staff members tested positive for coronavirus.
The Bill seeks to give legal effect to the Mid-Term Fiscal Policy Review Statement presented by Finance and Economic Development Minister Professor Mthuli Ncube in July.
It is necessary to deal with changes to tax laws announced by the Minister in the statement, which include raising the tax-free threshold to $5 000 and the widening of the income tax bands.
Expectations were that Prof Ncube would immediately bring the Bill to Parliament for the various fiscal measures to get legal effect.
Parliament however, took a long break after two legislators tested positive for coronavirus while conducting outreach programmes, further delaying tabling of the Bill.
Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi’s efforts will be made to bring it for debate before the end of the Second Session of the Ninth Parliament.
“You will recall that the Mid Term Fiscal Policy Review statement was delivered amid Covid-19 related challenges. That was when our MPs tested positive and we had to suspend sitting of Parliament. But we will bring the Bill soon to have it finalised,” said Minister Ziyambi.
He said the responsible Minister was empowered to apply some of the provisions retrospectively given that some of the measures were supposed to have already taken effect.
These included widening of income tax bands, payment of tax in foreign currency for specified circumstances and exclusion of payment of income tax in respect of the US$75 Covid-19 allowances for civil servants.
“The Minister of Finance and Economic Development is allowed to implement those fiscal measures before bringing a Bill that will then give legal effect to those measures. We will certainly ensure that the Bill is brought before Parliament for debate as soon as possible,” said Minister Ziyambi.
The Bill will amend the Finance Act, Income Tax Act and the Capital Gains Tax Act.
It also has new proposals on tax, value-added tax, customs and excise duties and mining royalties. The Finance Minister raised the tax-free threshold to $5 000 while those earning $100 000 and above will be taxed at 40 percent with effect from August 1.
According to the Memorandum, Clause 2 of the Bill will amend section 4A of the Finance Act that requires certain taxes to be paid in foreign currency in specified circumstances.
“The effect of this amendment is to update the cross-reference to the relevant taxing provision under Chapter VII of the principal Finance Act. The clause will also create a presumption that all taxable amounts received are received in US dollars, unless the recipients of the amounts furnish invoices or other documentary proof to the contrary,” reads part of the memorandum.
Clauses 3 and 4 of the Bill will amend section 14 of the Finance Act that prescribes income tax paid by various classes of taxpayers.
“With effect from 1 August, 2020, this Bill proposes to alter the income bands used in the calculation of income tax for the balance of the year of assessment, and in doing so will increase the tax-free threshold to $25 000,” further reads the memorandum.
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