HomeNewsEquate tax-free threshold with PDL — ZCTU

Equate tax-free threshold with PDL — ZCTU


The Zimbabwe Congress of Trade Unions (ZCTU) has called for the income tax-free threshold equal to the Poverty Datum Line (PDL) in the 2011 national budget as most workers are “earning starvation wages”.

The labour body, which has threatened protests to force employers to award workers better living wages in line with the country’s PDL that is currently estimated at $488, also called for an upward review of corporate tax that is 10% below the individual tax.

ZCTU’s western region representative Babra Tanyanyiwa said this here on Wednesday during a 2011 national budget consultative meeting organised by the Parliamentary Portfolio committee on Budget, Finance and Investment Promotion.

“The income tax-free threshold of $175 which was announced in the 2010 Mid-Term fiscal review still remains low relative to the PDL of about $500.

The position of ZCTU is that the income tax-free threshold should be set against the PDL,” said Tanyanyiwa.

She added: “It is also interesting to note that the corporate tax-free threshold of 25% is way below the highest individual margin tax rate of 35%.

“This is unfair, since companies are in business to make profits and most of their expenditure is tax-deductible.

Individuals, on the other hand, earn wages and salaries to make a living not for profit”.

By August, the average minimum wage was about 37,9% of the PDL, then about $488.

Tanyanyiwa said companies spend their earnings before they are taxed but individuals are taxed first before spending their meagre salaries.

“The position of ZCTU is that then tax rate should begin at 10% and end at maximum rate of 30%” she said.

The labour body said the country’s poorly paid workers are over-burdened by countless taxes which include Aids levy (3%), value-added tax (15%), National Social Security Authority contributions (3%) and an Automated Teller Machine (ATM) levy.

“The tax regime is burdensome for the worker who has to fill the void of the collapsing social services.

To add insult to injury, social security remains a challenge for most workers in Zimbabwe.

“The paltry payment of $25 per month as pension leaves a lot to be desired.

This amount is 5% of the PDL, meaning that most households are vulnerable to risks.”

However, participants expressed concern over what they called deliberate marginalisation of Matabeleland in resource allocation as revenue generated from the region is channelled to other areas.

They said tollgates fees raised from each region should be used in those respective areas.

“The use of tollgate revenue is problematic.

We want the budget policy that clear states that tollgate revenue generated from a specific area should be re-channelled to that region.

“It was disheartening to learn that close to $150 000 was recently allocated to the entire Matabeleland North region which has one of the major highways (Bulawayo-Victoria Falls Road) yet just one district , Zvimba, got as much as $2 million” said one resident.

The input from participants is expected to be forwarded to Finance minister Tendai Biti for consideration.

The committee is compelled by the Public Finance Management Act to consult the public, budget experts, business, civic organisations and professional bodies for their input in to the budget formulation process.

The meeting, dominated by Woman of Zimbabwe Arise and Men of Zimbabwe Arise activists nearly degenerated into chaos when MDC-M Tsholotsho South MP Maxwell Dube objected to what he said is “continued interpretation of Ndebele into English when Shona was not”.

Dube said this was unaccepted as Ndebele is one of the three national languages.

“Why is Ndebele interpreted into English as if it’s not a national language but contributions in Shona and English are not translated into Ndebele,” asked Dube.

However, the portfolio committee chairman Paddy Zhanda, in an attempt to quell tempers, further infuriated participants when he said:

“Why are we allowing ourselves to be bogged down by trivial issues of language?”

This did not go down well with the audience which said Zhanda was despising Ndebele.

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