GOVERNMENT yesterday gazetted the Finance (No 2) Bill, 2022, which if enacted will put into effect a cocktail of fiscal measures and reforms, including reinstatement of value added tax (Vat) to 15%, announced by Finance minister Mthuli Ncube in the 2023 national budget statement.
The Bill, which is currently before Parliament, will amend the Finance Act (Chapter 23:04), the Income Tax Act (Chapter 23:06), the Value Added Tax Act (Chapter 23:12), the Stamp Duties Act (Chapter 23:09) and others.
If passed, the Bill will also put into effect payment of royalties in minerals, as well as penalties for delayed tax remittance proposed in the 2023 national budget.
Some of the proposed amendments in the Bill relate to payment of taxes in foreign currency..
Section 4B of the Bill relates to penalties for delayed remittance of taxes by financial intermediaries that are used by taxpayers to pay taxes. The Bill also provides for adjustment of tax debts in foreign currency.
“Section 14 of the Finance Act prescribes the rates of income tax payable by various classes of taxpayers. Paragraph (b) (i) of the clause will alter the income ‘bands’ according to which rates of income tax are calculated. The main alteration is to the minimum level of income that will attract income tax, which is raised to $900 000 a year. The highest band is raised to $12 000 000 a year,” clauses 4 and 5 of the Bill read.
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Clause 6 of the Bill realigns the Intermediated Money Transfer Tax on foreign currency transactions to local currency transactions, at a rate of 2%.
Other amendments will include ensuring that land offer letters are replaced by a more secure agricultural land tenure document called a “Securitised A2 Permit”.
Clause 16 of the Bill reinstates the Vat rate to the previous rate of 15% (up from the temporary rate of 14,5%, which was in force during the COVID-19 lockdown period, with effect from January 1, 2023.
In addition, the services of bookmakers, pool promoters, totalisators and casino operators are also Vat-rated at 15%.
Clauses 20 and 21 provide for the remittance of royalties by mining houses, partly in the form of the mineral subjected to the royalty, and partly in cash.
Meanwhile, government also gazetted the Appropriation Bill (2023), which has to do with the actual budgetary allocations which ministries, government departments, commissions and State entities will get in 2023.
“The Consolidated Revenue Fund is hereby charged with such sums of money as may be required for the service of Zimbabwe during the year ending on the 31st December, 2023, not exceeding in aggregate the sum of three trillion six hundred and sixty-seven billion six hundred and ninety-five million six hundred and forty-eight thousand dollars only,” part of the Appropriation Bill read.
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