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*Tax-free Bonus Threshold Raised To $100 000*

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Finance and Economic Development Minister Mthuli Ncube has raised the local currency tax-free bonus threshold from ZWL$25 000 to ZWL$100 000.

Presenting the 2022 national budget statement in Parliament on Thursday afternoon, Ncube also announced an increase in the foreign currency tax-free bonus threshold from US$320 to US$700. Said Ncube:

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> I also propose to review the local currency tax-free bonus threshold from ZWL 25 000 to ZWL 100 000 and the foreign currency tax-free bonus threshold from US$ 320 to US$ 700, with effect from 1 November 2021.

Ncube also proposed to raise the excise duty on cigarettes, saying this will help to curb illicit flows and also mobilise additional revenue to the Fiscus. He said:

> In order to benchmark excise tax rates with the practice in the region, thereby curbing illicit flows and also mobilise additional revenue to the Fiscus, I propose to increase excise duty on cigarettes from 20% + US$5.00/1000 cigarettes to 25% + US$5.00/1000.

> I, further, propose to introduce a flat rate of excise duty on energy drinks at a rate of US$0.05/litre, or the local currency equivalent.

> Incidences of non-communicable diseases, in particular, cancer, diabetes and hypertension are on the increase.

Ncube announced that with effect from 1 January 2022, the non-taxable portion of the local currency tax-free threshold of retrenchment packages will be adjusted. He said:

> In order to preserve the value of retrenchment packages, I propose to review the non-taxable portion of the local currency tax-free threshold from the greater of ZWL50 000 or 1/3 of the retrenchment package, whichever is higher, up to a maximum of ZWL240 000, to the greater of ZWL400 000 or 1/3 of the retrenchment package, whichever is greater, up to a maximum of ZWL2 million, for income earned in local currency.

> This measure takes effect from 1 January 2021 (sic).

Companies that employ people living with physical challenges will get a tax credit of US$50 or local currency equivalent per month per additional employee recruited. Said Ncube:

> The NDS1 thrust is to protect vulnerable groups through new interventions and enhancement of existing programmes since people living with physical challenges face significant barriers to employment.

> I, therefore, propose to introduce a tax credit of US$50 or local currency equivalent per additional employee recruited per month for corporates that employ physically challenged persons.

> The credit will, however, be limited to a maximum of US$2 250 per year of assessment.

> This measure takes effect from 1 January 2022.

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