By Alois Vinga
FINANCE Minister Mthuli Ncube’s proposed amendments to eight key Acts allowing collection of tax in US dollars and the widening of tax free thresholds could soon see the light of the day following the gazetting of Finance (No.2) Bill.
The Bill was gazetted on Monday, paving way for the budget debate among other related issues to commence.
“The purpose of the Bill is to amend the Finance Act, the Income Tax Act, the Value Added Tax Act, the Customs and Excise Act, the Toll Roads Act, the Presidential Salary and Allowances Act, the Indigenisation and Empowerment Act and the Banking Act,” reads the Bill in part.
“These amendments will give effect to various fiscal measures mentioned by the Minister of Finance in the National Budget Statement delivered on the 26th November, 2020, and make certain modifications to improve revenue collection and administration.”
The amended Bill will entail businesses to pay corporate income tax in foreign currency on the basis of gross foreign currency receipts remaining after deducting the prescribed retention or liquidation thresholds.
The Bill also seeks to minimise the tax burden on unredeemed capital allowances as at 1 January, 2021 and these will be rebased to the local currency equivalent of the outstanding foreign currency invoice value at the beginning of each financial year.
The amendment also seeks to raise the tax-free threshold from $10 001 and end at $250 000 per month, above the Highest Marginal Tax rate of 40%.
“In addition, the lower general corporate tax rate of 24% will also apply to corporate taxpayers who are licensed investors, mining companies, industrial park developers and operators of tourist facilities,” says the Bill.
The amendment further seeks to review the youth employment tax credit for each employee hired from $60 000 to $180 000 during the year of assessment.
In order to encourage importation of fuel through the pipeline, it is proposed to review the Petroleum Importers’ Levy to USD$0.05 a litre on both diesel and petrol among other amendments.