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Bill, 2007 (H.B. 10, 2007)
of Finance presented his Mid-Term Fiscal Policy Review and Supplementary
Budget in the House of Assembly on Thursday 6th September. The Finance
Bill giving effect to the Minister’s proposals was then passed
by the House the same afternoon, without amendment, and transmitted
to the Senate.
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This Bill will
amend the Finance Act [Chapter 23:04], the Income Tax Act [Chapter
23:06], the Stamp Duties Act [Chapter 23:09], the Value Added Tax
Act [Chapter 23:12] and the Customs and Excise Act [Chapter 23:02].
In more detail, the individual clauses of the Bill provide as follows:
This clause sets out the bill's short title.
This clause will substitute section 3 of the Finance Act so
as to empower the Minister to change by regulations any rate of
tax, duty, levy or other charge that is charged or levied in terms
of any Chapter of the Act, in advance of the Charging Act by which
those rates, duties or levies are fixed.
Section 14 of the Finance Act prescribes the rates of income
tax payable by various classes of taxpayers.
This clause will alter the income "bands" according to
which rates of income tax are calculated. The main alteration is
to the minimum level of income that will attract income tax. At
present this minimum is $1 500 000 a month, and this clause will
increase that amount to $4 000 000 a month. The new bands will apply
for the period from the 1st September, 2007.
This clause will increase the rate of automated financial transactions
tax (the tax effected on cash withdrawals effected through an A.T.M.)
from $50 to $2 500 per withdrawal, with effect from the 1st October,
This clause will increase the tax based on the presumed income
of certain businesses ("presumptive tax"). The businesses
in question are operators of taxicabs, goods vehicles and driving
The Finance (No. 2) Act, 2005, changed the basis on which carbon
tax is charged to owners of vehicles resident in Zimbabwe from a
direct tax into a consumption tax payable at the point of importation
by oil companies per litre of petroleum products imported by them.
This clause seeks to raise the level of that tax from $100 per litre
of imported petroleum product to $5 000, payable with effect from
the 10th September, 2007.
The NOCZIM debt redemption levy was introduced by the Finance
Act, 2003, with effect from the 1st December, 2003, to enable NOCZIM,
the State petroleum company, to liquidate its debt obligations.
This clause seeks to increase this levy from $60 per litre to $2
500 per litre of a petroleum product purchased by an oil company
from NOCZIM or imported by an oil company, with effect from the
10th September, 2007.
This clause will partly replace the Schedule to Chapter I of
the Finance Act, which sets out the rates of income tax payable
by various classes of taxpayers. As indicated in connection with
clause 3 above, the income "bands" will be altered.
This clause will insert a new Chapter in the Finance Act, which
sets out the rates of rental to be charged on holders of offer letters
in respect of, or lessees of, Model A2 farms allocated to them by
the State. In the case of a lessee, the rentals specified in the
Schedule will be substituted for the rentals specified in the lessee's
land settlement lease, or, where the rental consists of two components
relating to the rental for the farm and the purchase of any improvements
thereon, the rentals specified in the Schedule will be substituted
for the first-mentioned component of the rental specified in the
land settlement lease.
Section 8(1) of the Income Tax Act defines the term "gross
income" for the purposes of the Act. Gross income derivable
from employment remuneration includes the value of certain benefits
(commonly known as "fringe benefits") afforded to employees,
such as the value of motor vehicles. For the purposes of taxation
motor vehicles have a specified deemed value. In paragraph (a),
the deemed motor vehicle benefit, which varies according to the
engine capacity of the vehicle, has been increased, from $100 000
to $7 200 000 for vehicles with the lowest engine capacity (i.e.
below 1 500 cc) and from $260 000 to $20 000 000 for vehicles with
the highest engine capacity (i.e. above 3 000 cc).
The Finance Act, 2005, provided for the taxation of income
from employment that is earned in the form of convertible currency.
This clause will amend the Thirteenth Schedule ("Employees
Tax") of the Income Tax Act to remove references to the "auction
rate", which is no longer used to determine the value of the
Zimbabwe dollar in relation to other currencies.
The Schedule to Chapter II of the Finance Act prescribes the
rate of stamp duty payable on various instruments. This clause will
increase the stamp duty payable on cheques from $100 to $5 000 with
effect from the 1st October, 2007.
The Finance Act, 2003, substituted section 115 of the Customs
and Excise Act by another section which authorised the Minister
to require persons, including residents of Zimbabwe, to be charged
in foreign currency for the importation of goods designated by the
Minister by notice in a statutory instrument to be luxury items.
This designation was eventually made by means of the Customs and
Excise (Designation of Luxury Items) Notice, published as Statutory
Instrument 80A of 2007, on the 5th April, 2007. Since the it has
been found that payment of the required duty in foreign currency
can be avoided where the importer of the luxury item in question
refuses to make due entry of the items (usually vehicles), and the
items are subsequently sold by ZIMRA at public auction. The purpose
of this amendment to section 115 of the Customs and Excise Act is
to provide that the bidding for luxury items at such auctions must
be done in a convertible currency.
Arrangement of Sections
1. Short title.
to Chapter 1 of Finance Act [Chapter 23:04]
2. New section
substituted for section 3 of Cap. 23:04.
3. Amendment of section 14 of Cap. 23:04.
4. Amendment of section 22B of Cap. 23:04.
5. Amendment of section 22C of Cap. 23:04.
6. Amendment of section 22E of Cap. 23:04.
7. Amendment of section 22H of Cap. 23:04.
8. Amendment of Schedule to Chapter I of Cap. 23:04.
9. New Chapter inserted in Cap. 23:04.
to Income Tax Act [Chapter 23:06]
of section 8 of Cap. 23:06.
11. Amendment of Thirteenth Schedule to Cap. 23:06.
of Schedule to Chapter II of Cap. 23:04
CUSTOMS AND EXCISE
13. New section
substituted for section 115 of Cap. 23:02.
BY THE MINISTER OF FINANCE
To make further provision for the revenues and public funds of Zimbabwe
and to provide for matters connected therewith or incidental thereto.
the President and the Parliament of Zimbabwe.
This Act may be cited as the Finance Act, 2007.
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