Finance Act

This is the main 2024 Finance Act, and its biggest single change is monetary. It inserts a new section 44D into the Reserve Bank of Zimbabwe Act authorising the Bank to issue Zimbabwe Gold notes and coins, backed by a basket of foreign currency reserves, gold and other valuable minerals held in the Bank's vaults and audited by external auditors at least once a year. One ZiG was fixed on 5 April 2024 at the value of one milligram of 99 per cent pure gold, and moves thereafter with the ZiG–US dollar inflation differential and the price of the reserve basket. ZiG is legal tender alongside other prescribed currencies, and the Act repeals the legal tender provision for bond notes and coins. The denominations issued are 1, 2 and 5 ZiG coins and 10, 20, 50, 100 and 200 ZiG notes. Every Zimbabwe dollar bank balance held on the day of issue was converted into ZiG by the statutory formula, and from 5 April all assets and liabilities previously expressed in Zimbabwe dollars are deemed to be in ZiG.

On income tax, the 2024 year of assessment for employment income is split into two periods — 1 January to 4 April in ZWL, and 5 April to 31 December in ZiG. The ZWL bands run tax-free to ZWL$2 336 065 then 20, 25, 30, 35 and 40 per cent; the ZiG bands run tax-free to ZiG12 204, then 20 per cent to ZiG36 612, 25 per cent to ZiG122 040, 30 per cent to ZiG244 080, 35 per cent to ZiG366 120 and 40 per cent above that. From 1 July 2024, a taxpayer earning more than half of total income in foreign currency accounts for tax as if half the income was earned in foreign currency. The tax-free bonus threshold becomes US$700 (or the local currency equivalent) across all bonuses in a year of assessment.

Presumptive tax is rewritten with US dollar monthly figures: taxicabs US$35; omnibuses US$50, US$60, US$80 and US$100 by seat band; goods vehicles US$200 for 10–20 tonnes, US$500 for a 10-tonne truck with trailers over 15 tonnes combined, and US$550 for 20 tonnes and over; driving schools US$50 (class 4) or US$100 (classes 1 and 2); hairdressing salons US$5 per chair; restaurants and bottle stores US$35; cottage industries US$100; butcheries US$50; beauty and massage parlours and gyms US$100 each; fishing rigs US$85; waterborne vessels US$30 to US$100 by capacity; informal traders 10 per cent of monthly rent; informal cross-border traders 20 per cent of the value for duty purposes. Presumptive tax is paid in local currency at the official rate on the day of payment. Self-employed professionals' presumptive tax is abolished — architects, engineers, lawyers, health practitioners and estate agents move to self-assessment, with the old rate continuing only until 1 January 2025.

Tax compliance gets sharper teeth. Architects, engineers, land surveyors, lawyers, auditors and accountants, health practitioners, veterinary surgeons, estate agents and quantity surveyors cannot be registered or renewed without producing a tax clearance certificate no more than thirty days old. Operators of taxis, omnibuses and goods vehicles cannot be licensed by ZINARA or obtain vehicle insurance without one. Under the rewritten section 81A of the VAT Act, only registered manufacturers, wholesalers and retailers who show registration and a valid tax clearance may buy from a manufacturer; manufacturers and wholesalers must withhold 5 per cent on sales to non-compliant buyers, with a 200 per cent penalty plus interest at the bank policy rate plus 5 per cent for failing to do so. Milk and bread, building materials, newspapers, airtime and data, school and hospital essentials and supplies to Government ministries are excluded from the withholding.

Other revenue changes: the automated financial transactions tax becomes the local currency equivalent of US$0,05 per withdrawal above US$100 from 3 May 2024; intermediated money transfer tax is 2 per cent, capped at a flat US$10 150 equivalent on single transactions of US$500 000 or more; capital gains withholding on listed securities becomes 2 per cent as a final tax and 5 per cent on other marketable securities for six months from 28 June 2024; VAT deferment on capital goods can now run up to three years for larger investment projects; the special surtax on the added sugar content of beverages is put on a statutory footing from 9 February 2024; and fuel moving in transit must have duty provisionally paid at the port of entry and refunded on acquittal at exit, except for fuel uplifted from NOIC's Msasa, Mabvuku and Feruka depots.

Beyond tax, the Act reserves several sectors under the Indigenisation and Economic Empowerment Act — including the haulage and logistics industry (rigid trucks up to 15 tonnes, tippers, fuel and LPG tankers, refrigerated and containerised trucks) and borehole drilling — and introduces asset disclosure. Members of Parliament must declare immovable property, movable property above a prescribed value and business interests to an asset disclosure register, with deliberate omissions prosecutable as perjury and refusal amounting to contempt of Parliament. A parallel regime is inserted into the Money Laundering and Proceeds of Crime Act for senior public officers across the judiciary, public service, Attorney-General's Office, NPA, defence, police, prisons and ZIMRA, benchmarked to be no less stringent than the parliamentary rules.

A few drafting slips are worth flagging. Section 7 is headed "Amendment of section 22G" but its text says section 22C is repealed and substituted, and the substituted section 22G then has two paragraphs both lettered (a). Section 9 is headed as amending section 35G of the Income Tax Act but its text amends section 36G. These look like printing errors rather than substantive puzzles.