When it comes to raising revenue the government led by Finance Minister Mthuli Ncube has been pretty aggressive when it comes to taxes. Over the past few years, they have raised various taxes in a bid to reduce the government deficit. While this is a noble pursuit their taxation policies have often left citizens scratching their heads. Recently we learnt that the government would start taxing those who receive salaries in both USD and ZWL exclusively in USD at the interbank rate. This is despite the fact that most people who earn hybrid salaries often get the bulk of their salaries in ZWL and not USD with USD only making a small portion of what they earn.
We also have another shocker. The finance minister wants kombis to pay taxes. This is just one of the anti-small businesses measures the government has introduced over the years. What is baffling here is the fact that thanks to the kombi ban from 2020 when the coronavirus began, there are hardly any kombis still on the road. Prior to the ban kombis dominated the urban commuting sector but the ban has decimated their influence. Instead, we have ZUPCO contracted buses that were awarded the monopoly. Strangely the Finance Act is silent on how ZUPCO buses will pay taxes if they will pay taxes at all. Traditionally ZUPCO,a state-owned entity, has not paid taxes, instead, it has been on the receiving end of many a government bailout funded by taxpayers. Given how parastatals are run it’s hard to imagine this latest venture will fair any better than the last ZUPCO forays we have seen in the past. As most buses are actually contracted as opposed to owned by ZUPCO perhaps each bus company will pay taxes formally when they report their profits.
- Anyway, kombis will pay taxes of about $4 065ZWL – $8 0025 per month in presumptive taxes depending on the carrying capacity of the kombi
- Hairdressers, yes those struggling hairdressers, will have to pay $4 065 ZWL in taxes per month
- Cross border traders will have to pay 10% of the commercial value of goods they bring into Zimbabwe in taxes
- Lawyers up to $12 000 ZWL in taxes
- Doctors who practice privately up to $12 500 ZWL in taxes
- Engineers up to $6 000ZWL
- Real Estate agents will be paying a whopping $1 625 000 ZWL per month. And you wonder why most real estate agents are not registered
Again to sum up government policy towards small and informal businesses it is tax tax tax and give nothing in return. While big businesses are showered with cushy discounted foreign currency small businesses are often left to fend for themselves while they also have to contend with the taxman’s foot on their necks. That is likely to be detrimental to the economy given the fact that informal businesses form as much as 70% of the Zimbabwean economy.
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