Zimbabwe's Finance Act (No. 2) 2019 was published in the Official Gazette on 21 August 2019. As compared to the Finance Bill (previous coverage), one of the key differences is with respect to the annual individual income tax brackets and rates for employment income, which are as follows in the Act with effect from 1 August 2019:
USD bracket thresholds are also specified in the Act with effect from 1 August 2019 as follows:
Employees earning employment income in a foreign currency are required to account for tax based on the USD brackets. Where the foreign currency is other than USD, it must be calculated in USD based on the international exchange rate on the date the income is received or accrued. The applicable ZWD and USD brackets and rates have been confirmed in tax rate tables published by the Zimbabwe Revenue Authority, which also include the daily, weekly, fortnightly, and monthly rate tables.
Further to the individual income tax changes, the Act also provides for changes in capital gains taxation. This includes that capital gains derived from the disposal of assets acquired before 22 February 2019 are subject to tax at a 5% rate, while gains from the disposal of assets acquired after 22 February 2019 are subject to tax at a 20% rate. It is also provided that for gains from the sale of property, the withholding tax rate is 5% for property acquired before 22 February 2019 and for property acquired after 22 February 2019, the withholding rate is 15%, subject to a final assessment rate of 20%. Lastly, it is provided that for marketable securities, the capital gains withholding rates for listed and unlisted securities are 1% and 5%, respectively.
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