President signs 2022 budget laws
President Mnangagwa has assented to the two sets of law required to implement the 2022 National Budget presented by Finance and Economic Development Minister Professor Mthuli Ncube in November, so all the tax changes can now be implemented and the spending approved by Parliament can proceed.
Prof Ncube presented a $927 billion budget that was welcomed as people-centred by ordinary Zimbabweans.
The two budget Acts, the Finance Act, which deals with taxation changes and other revenue mattes, and the Appropriation Act, which gives permission to the Government to spend much of this revenue, with a modest amount of spending confirmed in permanent legislation, were published in the Government Gazette on Friday.
The Finance Act amends the Income Tax Act, the Value Added Tax Act, the Capital Gains Act, the Customs and Excise Act and the Revenue Authority Act.
It gives effect to the fiscal measures, basically the tax changes, mentioned by Prof Ncube in the National Budget statement delivered and make certain modifications to improve revenue collection and administration.
The Appropriation Act provides for the money allocated to all ministries and Government departments.
Both Acts were passed by the Parliament without amendments.
Some of the tax measures presented by the minister and contained in the Finance Act include the adjustment of the tax free threshold from $10 000 to $ 25 000 and also adjust the tax bands to end at $500 000 above which a marginal tax rate of 40 percent effective this month.
The Act also provides for the adjustment of the local currency tax-free bonus threshold from $25 000 to $100 000 and the foreign currency tax-free bonus threshold from US$320 to US$700, with effect from November 1, 2021. The heirs of a deceased person now only need to pay estate duty, a tax, on values over US$100 000, meaning most houses can now be inherited with only ordinary transfer charges and a small administrative fee.
Of the $927 billion the Government expects to mobilise $858 760 712 000 through the Consolidated Revenue Fund, where the taxes are banked, while the small balance would be raised through Treasury Bills and Bonds. Government will only borrow for capital spending, and even then only when there is an immediate revenue source crated that will pay back the borrowings.