Zimbabwe’s largest labor federation has called on the government to impose a 25 percent cap on income tax and a review of the 2010 tax-free threshold to match the average cost of living estimated at around $500 a month.
Zimbabwe Congress of Trade Unions (ZCTU) president Lovemore Matombo said the federation’s general council had resolved that individual tax rates should “begin at 10 percent and end at a maximum rate of 25 percent” in 2010.
He branded as “unfair” the decision by Finance Minister Tendai Biti to reduce corporate tax from 30 percent to 25 percent while individual marginal tax rate was only reduced from 37.5 percent to 35 percent.
“ This is unfair considering that companies are in business to make profit, moreover most of their expenses are tax deductible, while individuals earn to make a living and they are taxed first before spending their incomes,” Matombo said.
The labor federation demanded a review of the tax-free income threshold for individuals from the current $160 a month to match the poverty datum line or “breadline” set at more than $500.
Income tax and customs duty have been the main sources of income for Zimbabwe’s cash-strapped coalition government since its formation in February.
Biti announced at the beginning of December that he hoped to raise more from taxes next year to compensate for difficulties the government has been facing in attracting budgetary support from Western donor nations and international multilateral financial institutions.
Source African Press Agency
