When Mthuli Ncube introduced the infamous 2% tax last year, he set up a tax-free threshold of transactions worth USD $10. That means that all USD $10-and-below transactions were exempted from being charged 2% tax. For business the tax-free threshold was USD $10 000 for transactions with the value exceeding USD $500 000.
When the Zim dollar was introduced, the tax-free thresholds remained the same until last week during Mthuli Ncube’s Midterm Budget presentation. The Finance Minister decided to review upwards the tax-free threshold- from ZWL $10 to ZWL $15 for individuals and from ZWL$10 000 to ZWL $15000 for businesses (for transactions with value exceeding ZWL $750 000). In the Midterm budget review, the Minister said:
In view of the changes in the macroeconomic conditions, I propose to review the tax-free threshold from the current ZWL$10 to ZW$20 and the maximum tax payable per transaction by corporates from the current ZWL$10 000 to ZW$15 000 for transactions with value exceeding ZWL$750 000.
I still hate the tax but reviewing the tax-free threshold upwards is sensible given that the cost of living has gone up and people and businesses are now spending more money than they used to when the tax was introduced.
There’s more good news. Even with the said reprieve, Mthuli Ncube is further going to introduce new exemptions that will lighten the burden of the 2% tax.
Furthermore, I propose to exempt additional transactions from IMTT in order to eliminate double taxation.