‘Tax-free threshold unchanged’

ZIMBABWE Revenue Authority (Zimra) has cleared the air on misinterpretations on tax-free threshold stating that it remains at $700 monthly and $3 500 annually.

In a statement, Zimra spokesperson Mr Francis Chimanda said initially the tax table in Finance Act No. 2 of 2019 erroneously shows 45 percent as the marginal tax rate for employees earning $150 and above instead of 40 percent.

Mr Chimanda said stories carried in the media last week alleging that the tax-free threshold was now $3 500 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 August 21, 2019.

“The Finance Act pronounced changes in the tax bands and tax rates on employment income. These new tax bands and rates are applicable for the period of five months from August 1 to December 31, 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.

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