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ZCTU threatens action over tax
Nqobani Ndlovu, The Standard (Zimbabwe)
April 12, 2008

View this story on The Standard website

The Zimbabwe Congress of Trade Unions (ZCTU), last week called on the government to reverse its recent decision to widen income brackets or risk nationwide protests from overtaxed workers.

The labour body said the increase was a ploy to raise funds to finance Zanu PF's election campaign in anticipation of a presidential run-off. In a statutory instrument published a fortnight ago, the government raised taxable earnings from 47,5% to 60% for those earning $20 billion and above.

Zimbabwe has one of the highest tax regimes in the world but has very few social incentives that benefit the workers.

Its health delivery system, supposedly financed from taxes, has virtually collapsed, as defence expenditure has risen The new tax rate means a worker on $20 billion a month would be left with about $8 billion after tax and other deductions.

ZCTU secretary general, Wellington Chibebe said the government was being "insensitive".

He said the move would force the labour organisation to "take action" against the government to push for lower taxes to about 30% and below. Said Chibebe: "It would seem that the increase in income tax was a ploy by the government to finance the Zanu PF election expenditure after they ransacked the foreign currency accounts of mainly non-governmental organisations.

"The ZCTU demands an immediate redress of this scenario that has shown high levels of government insensitivity to the plight of the long-suffering workers."

Chibebe said the ZCTU would be forced to take action if whoever was responsible for the announcement did "not correct this situation".

No comment could be obtained from Public Service, Labour and Social Welfare Minister, Nicholas Goche, as his mobile phone was unreachable. Chibebe said: "Surprisingly, nothing has been mentioned about businesses because most of the former government ministers are now businesspeople and are therefore protecting their businesses.

"Businesses are taxed at 30% while they are in business to make profit and workers labour to make ends meet.

"Workers continue to negotiate for the government to earn more revenue in taxes while they remain poor."

Zimbabwe's workforce is grappling with constant increases in the cost of basic commodities and transport - sparked by runaway inflation which currently stands at over 160 000% - yet their salaries remain stagnant. Analysts blame the state of the economy on ill-planned government policies, a charge the government officials deny.

The government blames the West for imposing targeted sanctions on selected political leaders and their allies in other sectors.

The government insists the sanctions have hit ordinary citizens hard, a charge denied by the West, which is providing humanitarian aid, including drugs and food aid.

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