A Zimbabwe Revenue Authority (ZIMRA) report has shown that workers are among the government’s major revenue sources contributing more to the national purse than companies.
The report states that individuals, through pay-as-you-earn (Paye), contributed 17.9% of the overall quarterly tax figure while corporates contributed 15.3%. ZIMRA said in its latest revenue performance report:
Tax collected from individuals grew nominally by 97,48% in Q1 2022 as compared to the same period in 2021. This is largely a reflection of general wage increases made in different sectors in order to cushion employees against the rising cost of living.
Experts said the statistics were clear testimony that workers were being overtaxed, which has left them struggling to make ends meet on the little that remained after tax in the wake of galloping prices of basic goods and services being driven by runaway inflation.
Labour unionist Peter Mutasa said workers in Zimbabwe were overtaxed compared to other countries in the region because of the heavy basket of taxes besides Paye. He said:
a). workers pay Paye, “which is as high as 40%,
b). They also pay the National Social Security Authority tax,
c). in addition, workers also pay other indirect taxes like the 2% (intermediated money transfer tax) IMTT,
d). they also pay taxes to local authorities
e). they also pay VAT (value-added tax).
While other countries sought to lessen the tax burden on workers, in Zimbabwe authorities introduced new taxes such as the presumptive tax and IMTT to grow the revenue base.
Former Finance minister Tendai Biti yesterday said the Zimra figures confirmed that Zimbabwe was in “deep depression,” the reason why the government was “squeezing the ordinary person.”
Meanwhile, Zimra’s net revenue collections amounted to $174 billion in the first quarter of 2022, against the target of $165.4 billion.
More: NewsDay Zimbabwe
