The government has adjusted the monthly tax-free income tax threshold to approximately Zimbabwe Gold (ZiG) 1,356, following sharp depreciation of the Zimbabwe dollar (ZWL), which has been replaced by ZiG this month.
NewsDay claims that because of currency devaluation, the prior barrier of ZWL 750,000 only equaled US$28.39 at the end of the first quarter of the year—much less than the cost of living. When the tax-free income tax threshold of ZWL 750,000 was introduced at the end of January 2024, this represented a sharp drop from approximately US$74.
Minister of Finance, Economic Development, and Investment Promotion Mthuli Ncube published Statutory Instrument (S.I.) 74 of 2024 on Friday, setting the monthly income tax threshold at ZiG 1,356, or around $100 USD, free from federal income taxes. ZiG 12,204, as described in the S.I. for the period of April 5, 2024, to December 31, 2024, was the source of this computation.
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According to the S.I., those who make between ZiG 12,204.01 and ZiG 36,612 in a certain time are going to pay income tax at the rate of 20%. Income tax rates range from 25% for those making between ZiG 36,612.01 and ZiG 122,040 to 30% for those making between ZiG 122,040.01 and ZiG 244,080. Furthermore, the tax rate for those earning ZiG 244,080.01 to ZiG 366,120 is 35%, whereas the tax rate for those making ZiG 366,120.01 and above will be subject to a 40% income tax rate.
For the 20% tax bracket, these tax rates are expressed monthly as follows: ZiG 1,356.01 to ZiG 4,068; ZiG 4,068.01 to ZiG 13,650; ZiG 13,650.01 to ZiG 27,120; ZiG 27,120.01 to ZiG 40,680; and ZiG 40,680.01 and above for the 40% bracket.
