Taxpayers hit with new levies
STAFF WRITER
Finance, Economic Development, and Investment Promotion Minister Mthuli Ncube yesterday unveiled a series of new taxes as part of Zimbabwe’s 2025 national budget, further straining already burdened taxpayers.
The measures, which take effect on January 1, 2025, aim to bolster government revenue to address increasing fiscal demands.
Ncube introduced a 10% withholding tax on gross winnings from sports betting. The levy, applicable to both in-house and online betting, is intended to integrate punters into the tax base. Currently, bookmakers pay a 3% tax on gross takings from bets, while punters had previously been exempt from taxation on winnings.
A new 0.5% tax on sales from fast food outlets will also be implemented. Targeting items like burgers, hot dogs, shawarma, French fries, and doughnuts, the measure seeks to address concerns about obesity and related health issues linked to the consumption of processed foods.
To encourage environmentally friendly practices, a 20% tax on the sale value of plastic carrier bags will be introduced. However, businesses supplying recyclable plastics worth up to US$5,000 annually will be exempt from withholding taxes to support recycling initiatives.
In a significant policy shift, Ncube announced the removal of the five-year tax holiday for investors in special economic zones. Instead, a 15% corporate income tax rate will be applied, balancing incentives for investment and export promotion with contributions to the national treasury.
The sugar tax on cordials will be reduced from US$0.001 per gram to US$0.0005 per gram, following industry concerns about unfair taxation compared to ready-to-drink beverages. Meanwhile, liquefied petroleum gas (LPG) will be exempt from value-added tax (VAT) to mitigate the impact of rolling power cuts and encourage environmentally friendly energy alternatives.
Government expenditure on salaries is projected to reach 56.4% of revenue in 2025, surpassing the 50% threshold set by policy. To address this, the government plans to freeze recruitment in all but critical sectors like health and education.
Acknowledging the ongoing power shortages, Ncube pledged increased investment in energy projects, including refurbishing Hwange’s Unit 5 and launching 100 mini-solar grids with Chinese funding. However, immediate relief for the crisis remains uncertain.
