Zimbabwe’s President Robert Mugabe’s government has increased the income tax bracket, in the middle of parliamentary and presidential election results and vote counting, a move that will definitely severely erode the consumer’s purchasing power owing to poor salaries.

Robert Mugabe & his wife Grace Mugabe Leaving The Polling Station

It also comes in the wake that currently, Mugabe’s wings have been clipped because of the ongoing elections, and therefore he cannot make any decisions concerning the nation in general.

According to the Extraordinary Government Gazette published on Tuesday the 1st of April (Fools Day), the maximum percentage tax band that is currently pegged at 47.5 percent has been moved to 60 percent for those earning $20 billion or more with effect from this month.

Those earning between $10 billion and $15 billion would be taxed at 52.5 percent while people earning between $5 billion and $10 billion would now be taxed at 50 percent.

Government has also widened the tax-free income threshold from $30 million to a mere $300 million per month with effect from this month

A Harare based analyst says this clearly shows the ruling ZANU PF government has totally failed the country.

“The move is ridiculous because to a larger extent, it will make the ordinary worker suffer the most.”

“Firms will not be able to give workers meaningful salaries and wages, as they will also try to evade the tax system,” he said.

The Zimbabwe Election Council (ZEC) is currently in the process of announcing the Parliamentary election results, and still to count and verify the Presidential votes.

The Government has also imposed higher tax bands to those earning a cumulative gross salary of between $45 billion and $90 billion for the next 9 months to 50 percent.

Those earning between $2.8 billion and $5 billion would be taxed at 47.5 percent while those earning between $2.3 billion and $2.8 billion would be taxed at 45 percent.

From $300 million to $800 million it is 25 percent whilst the monthly slice income tax rates under $300 million is zero.

The analyst says this move can be classified as sabotage regarding the responsible parties are not in office hence if they lose the elections, they will not be available to settle the issue.

“In normal circumstances, government should reduce the income tax band so as to realise more returns from VAT.”

“This is because after taking home more money, consumers are able to spend more and in this case both the worker and the government benefits,” he said.

The Zimbabwe Congress of Trade Unions (ZCTU), among other pressure groups have for long been calling on the government to review upwards the income tax bracket, which always falls below the Poverty Datum Line (PDL).

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