Tax free threshold still at $700:Zimra

Munyaradzi Musiiwa, Midlands Correspondent

THE Zimbabwe Revenue Authority (Zimra) has cleared the air on the $ 3 500 tax-free threshold misinterpretations stating that the tax free threshold remains at $ 700 monthly and $ 3500 accumulatively up to December.

In a statement released by Zimra Spokesperson, Mr Francis Chimanda, the revenue authority initially pegged the tax table in Finance Act No. 2 of 2019 erroneously showing 45 percent as the marginal tax rate for employees earning $150,001 and above instead of 40 percent.

Mr Chimanda said stories carried out in the media last week alleging that the tax-free threshold was now $3500 had some incorrect facts.

“Following the 2019 Mid-Year Budget Review by the Minister of Finance and Economic Development on 1 August 2019 Finance Act No 2 of 2019 was gazetted on 21 August 2019. The Finance Act pronounced changes in the tax bands and tax rates on employment income. These new tax bands and tax rates are applicable for the period of five months from 1 August to 31 December 2019. The daily, weekly, monthly tax bands and tax rates are extracted from these five month rates.

“The tax table in Finance Act No. 2 of 2019 erroneously shows 45 percent as the marginal tax rate for employees earning $150,001 and above instead of 40 percent. Therefore Public Notice No. 35 of 2019 was issued on 20 September 2019 to advise all taxpayers of this correction,” he said.

Said Mr Chimanda: “The legislation to correct the change from 45 percent to 40 percent will be gazetted in due course. However, employers must with immediate effect apply the rate of 40 percent as the top rate pending the legislation amendments. The rate of 40 percent is effective from 1 August 2019.

Following the publication of Public Notice No. 35 of 2019 on 20 September 2019, in the print media, Zimra noted misleading interpretation that require clarification.”

Zimra also released a tax tables for calculating tax for employees earning remuneration in Zimbabwe dollars daily, weekly, monthly or annually with effect from 1 August 2019 that showed the tax-free threshold at RTGS $ 700.