Back to Index

Statement on the non taxable income tax threshold
Zimbabwe Congress of Trade Unions (ZCTU)
July 27, 2004

The Zimbabwe Congress of Trade Unions (ZCTU) acknowledges the efforts by the Acting Minister of Finance and Economic Development, Herbert Murerwa, to increase the non-taxable income tax threshold for individuals from
$200 000 to $750 000 per month effective from September 1, 2004.

For the first time government has acknowledged the existence of labour and that workers should have disposable incomes, but this move still falls far too short of the expectation of workers in general and the ZCTU in particular.

For starters, the tax bends are still very narrow, grouping a lot of workers within the $750 000 to $1 500 000 the maximum threshold per month is unacceptable.

While moving the tax threshold to $750 000 may appear beneficial to the workers at the moment, it should have been effected now rather than wait for September. Effecting the changes from September 1 will render the increase of the threshold ineffectual as by that time a lot of workers will be earning above the income tax threshold, meaning that they will now be in the 45% tax bracket. This is reminiscent of the last scenario when the threshold was raised from $15 000 to $200 000 and by the time it was effected, it had already been eroded by inflation and had been overtaken by events, since most workers were earning above the $200 000 threshold.

The ZCTU therefore maintains its stance that workers earning below the poverty datum line ($1 069 300) as at July 2004, should not be taxed as by September 2004, the poverty datum line (PDL) would be around $1 500 000 which effectively means that people earning the same amount as the PDL, that is $1, 5 million, will be taxed at 45%.

The highest tax threshold should be $48 million per annum ($4 million per month) instead of the government proposed $18 million ($1, 5 million per month) and should not be more than the company tax which is at 30%.

The position of government smacks of capitalistic tendencies as evidenced by the low company tax (30%) while workers are taxed to death (45%) when government purport to support socialist ideologies.

It is regrettable that government inherited and perfected the Rhodesian tax regime which perpetuated workers poverty with its retrogressive tax structure.

The ZCTU expects a meaningful reduction on tax and come 2005 Annual budget announcement income tax threshold should be reduced from 45% to 30%.

Wellington Chibebe
Secretary General

Visit the ZCTU fact sheet

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP