BUSINESS REPORTER
The Zimbabwe National Chamber of Commerce (ZNCC) has called for the government to more than double the tax-free threshold to ZWL$25,000 to minimise the tax burden and enhance disposable income, Business Times can report.
ZNCC wants the tax-free threshold to be increased from the current ZWL$10 000.
The call comes at a time when most workers are battling Covid-19-induced economic challenges.
The cost of living for a family of six has surpassed ZWL$41,000 making it difficult for an already struggling worker who earns less than 50% of the poverty datum line.
“There is need for an increase of the tax free threshold from ZWL$10 000 to ZWL$25,000 to lift the burden on civil servants and other low income bracket earners who have not had a salary adjustment,” ZNCC chief executive officer Christopher Mugaga told Business Times.
The move would motivate workers, who have been adversely affected by Covid-19 pandemic.
Private sector employees are blaming the businesses for giving lower salaries and want the salaries to be increased to above the consumer council basket for a low income earning family.
Zimbabwe Congress of Trade Union president Peter Mutasa said the same private sector which is calling for the government to increase tax free threshold was also providing low salaries.
Mutasa wants the threshold to be pegged at ZWL$45 000.
“We agree with the business that the tax-free threshold should be increased but it should be set at around ZWL$45,000 per month, a figure which is above the consumer council basket for a family of six,” Mutasa said.
“However, the private sector should also increase its salary caps as it has one of the lowest salaries in the country. As the business community advises the government to increase the tax free threshold, it should also increase its salaries to above ZWL$41, 000.”
The cost of living as measured by the Consumer Council of Zimbabwe’s low income urban earner monthly basket for a family of six increased to above ZWL$41,000 by mid-June 2021 from ZWL$37,000 in mid-May.
“As CCZ, the increase in the total figure of the basket is attributed to the price increases shown above especially on the basic food items, due to inflation; influence of the exchange rate, speculation by consumers (fuelling demand) and in exceptional cases the parallel market,” CCZ said.
“The market is slowly adjusting to the displaying of prices in both US$ and RTGS as provided for by the Statutory Instrument 185. CCZ observed that most of the big supermarkets are complying with the Statutory Instrument 185.”
