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Bank workers appeal to finance boss

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BY VANESSA GONYE
WORKERS in the banking sector have implored Finance minister Mthuli Ncube to act on high income tax rates which they say are eroding their meagre salaries.

In a letter to Ncube on Wednesday, the Zimbabwe Banks and Allied Workers Union (Zibawu) said workers were struggling due to low salaries caused by hyper-inflation and high taxation levels in the country.

The workers cited the Finance Act (No 7) of 2021 as the basis for their plea for government to review taxation.

“We note that Finance Act (No  7) of 2021 which was gazetted on December 31, 2021 and became effective on January 2022, has a revised provision that regulates the rates of income tax for employees. The amendment resulted in the tax free bracket merely shifting from $10 000 to $25 000 in 2022, and the tax brackets remain relatively compressed in real value terms compared to what they were during the United States dollar era.

“We further note that due to currency depreciation coupled with salary increases in line with inflation, employees now invariably fall in higher tax brackets, thereby lowering disposable incomes. The general trend is such that most workers will fall in the high tax brackets which are not reflective of real incomes if regard is taken to US$ values. The high inflation and currency depreciation also represents a significant indirect tax on workers’ salaries,” the Zibawu statement read.

Zibawu also expressed concern over increases in prices of goods and services in foreign currency, which have further worsened the plight of workers who are paid in local currency.

“We request that tax brackets in both USD and Zimdollar be widened in line with inflation and currency depreciation. Where employees are paid in dual currency, the willing buyer, willing seller exchange rate can be used to determine applicable taxes in Zimdollar,” the statement read.

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