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Zimbabwe: Tax measures in 2019 mid-term fiscal policy review statement, draft finance bill

Zimbabwe: Tax measures in 2019 mid-term fiscal policy

The Minister of Finance and Economic Development in August 2019 presented the 2019 mid-term fiscal policy review statement.


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Among the tax-related measures in the mid-term fiscal policy review statement and the draft finance bill are the following items:

  • Proposed repeal of measures, so as to allow foreign investors to own more than 51% of businesses in the diamond and platinum sectors
  • Revised tax thresholds and rates for the “Pay As You Earn” (PAYE) regime, effective 1 August 2019, and separate U.S. dollar and Zimbabwe currency tables; the tax-free band increased to ZW $700 per month (up from ZW $350) and the highest marginal ZW tax rate reduced to 40% (note, in the final version of the legislation, as published in the official gazette, this tax rate was only reduced to 45%)
  • Revised tax thresholds (revised upward by a factor of eight (8))
  • No change to the value added tax (VAT) registration threshold
  • No change to the annual tax-free bonus threshold for employees
  • Introduction of 2% royalties for small-scale gold miners and a floating rate between 3% and 5% for large-scale miners; mining royalties to be deductible beginning 1 January 2020
  • Increased excise tax (duty) on fuel, tobacco, and alcohol products
  • Established rate of capital gains tax on immovable property acquired before 22 February 2019 at 5% of the gross selling price or assessed value

There were no proposals for changes to the rebase capital allowances in respect of capital investment made in U.S. dollars prior to the introduction of the ZW dollar. This is expected to result in significant increases to the effective tax rates of businesses above the 25.75% corporate income tax rate.

Read an August 2019 report [PDF 1.5 MB] prepared by the KPMG member firm in Zimbabwe

The Finance Act No. 2 of 2019 was published in the official gazette on 21 August 2019. There were changes made in the final version of the legislation. Read TaxNewsFlash

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