FINANCE minister Herbert Murerwa has proposed to increase the non-taxable income threshold from $15 000 to $200 000 a month. He has also proposed to increase the tax-free portion of this year’s
bonus or performance-related award from $20 000 to $100 000.
Murerwa said the measures would release $1,2 trillion to taxpayers.
Murerwa submitted yesterday that high levels of inflation had pushed income earners to the wall and proposed an increase in the income-tax threshold.
“High levels of inflation have eroded the purchasing power of workers. I therefore propose to take measures that will give relief to individual taxpayers from the effects of these developments.”
The minister proposed that the new tax threshold be effected from January 1. He also widened the income tax bands up to $375 000 per month, above which tax will be at 45% of income.
As a way of solving rampant tax evasion, Murerwa proposed the empowerment of the Commissioner General to estimate tax not remitted within the required period and track down the culprits.
He also proposed to increase income tax credits for the elderly, the blind and the disabled from the current $20 000 to $120 000 starting January 1. The tax, he said, would help cushion the less privileged members of society.
Murerwa proposed to move tax-free pension contributions that are currently at $90 000 per annum to $720 000. He also proposed to increase the tax-free portion on the conversion of pension from $250 000 to $1 million.
He proposed to remove the restriction on pension and provident funds regarding the aggregate maximum yearly contributions that a member can make to a pension or retirement fund, which was limited to 25% of the member’s gross salary.
The minister said he would maintain the corporate tax rate at the current level of 30%.