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Civil servants boost taxes
Shakeman Mugari, The Zimbabwe Independent
January 19, 2007

http://www.theindependent.co.zw/viewinfo.cfm?linkid=11&id=9868&siteid=1

GOVERNMENT has been forced to increase civil servants' salaries by about 400% to ensure that their wages remain taxable.

Government had initially budgeted a salary increase of 300% but reviewed the figure earlier this month after realising that most civil servants would fall below the tax-free threshold of $100 000 a month.

Teachers will now get a basic salary of $126 000, up from $31 000 last year. Their housing and transport allowances which were increased by 140% and 100% respectively are still higher than their basic salaries.

Government has been on a desperate drive to shore-up its tax earnings in the wake of massive retrenchments, brain drain and company closures which have affected its revenue.

Some of the measures include the proposed introduction of a compulsory national medical aid insurance scheme under NSSA and the widening of tax brackets to net as many taxpayers as possible.

Apart from widening the bands, the government has also increased the tax that will be paid by top earners. According to a Zimra schedule, the highest taxed worker will pay 47,5% ($5 million and above) while the lowest pays 25% ($100 000-$200 000).

Last year the lowest taxed person was paying 20% while the highest was paying 35%. Those getting $200 000-$300 000 will pay 30%, up from 25% last year.

Tax bands have also been increased from four to six to squeeze as much money as possible from the taxpayer. Government has also brought forward the due date for VAT submission from companies from the 30th to the 20th of every month.

The new tax bands make Zimbabweans some of the most heavily taxed people in the world. Apart from the PAYE, Zimbabweans are also subjected to an avalanche of taxes that affect every facet of their lives.

They pay an Aids levy (3%) —— which rarely benefits them when they are sick — and a NSSA pension (3%) whose payouts can only be described as a pittance.

They are forced to pay VAT (15%) on almost every product they buy and carbon tax for their cars which goes anywhere except the road system.

If they invest on the money market, the taxman will chop 20% of their profit. And if a listed company pays out their dividend, government wants 20% of the cheque. If the dividend is from a private company investors are required to surrender 10% to the state.

Property sellers must remit 20% of revenue to the taxman. On buying diesel and petrol they pay $60 per every litre towards the Noczim debt amortisation levy.

For every cheque they write, government wants $100 for stamp duty. On retirement their benefits are also taxed.

The dead do not escape taxation because a chunk of their estate is also deducted. The tax burden on the companies is also huge. They have to pay 30,9% of their net profit to government.

Then there is 15% VAT, Aids levy 3%, Zimdef which takes 1% of the wage bill and the Standards Levy. They also have to match their workers' NSSA contributions and other pensions and medical aid schemes.

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