Workers are set to have more money in their pockets as Treasury will continuously review the income tax free threshold, currently pegged at $5 000, to increase their disposable incomes.
This was said in Senate yesterday by Finance and Economic Development Minister, Professor Mthuli Ncube who explained that although the country’s exchange rate had continued to stabilise on the back of several fiscal measures introduced by Government, workers still needed to be cushioned.
Prof Ncube said this during debate on the Finance Bill, which was passed on Wednesday evening, giving legal effect to the Mid Term Fiscal Policy Review statement.
The Bill now awaits the President’s assent before it becomes law.
Some Senators had raised concern on the current $5 000 income tax-free threshold saying inflation was eroding salaries and wages.
Prof Ncube said the economy was now on the recovery path owing to several fiscal measures Government introduced, including the curtailing of speculative behaviour.
“On the thresholds, we have been dealing with inflation, an exchange rate which has been moving upward but now I am pleased to see that the exchange rate is now stable.
“The measures included the introduction of the foreign currency auction system, dealing with errant mobile money companies, tightening things on the fiscal front, curtailing gross money supply and dealing with speculative behaviour on the Zimbabwe Stock Exchange.
“The combination of all those measures which have been undertaken at the same time has produced a stable exchange rate. We are pleased with this,” said Prof Ncube.
“So, if there is still need that perhaps in order to restore the value of incomes, thresholds need to be increased and so forth, I would suggest that the next Budget is in two months’ time. We will have another opportunity to review this together. We will do a retreat as usual together and I think this year it will be a virtual retreat because of Covid-19, but we will have an opportunity to do it again. My desire this time was to give everyone just a relief, for now $5 000 and in another two months we will be back here (in Parliament) considering the 2021 Budget in the month of November.”
He said the Government remained committed to the improvement of conditions of service for its workers.
Commenting on the provisions of the Finance Bill, Prof Ncube said the proposed law sought to provide relief to taxpayers, enhance disposable incomes and promote capital accumulation which is crucial in supporting the economic rebound and also to protect revenue sources.
Meanwhile, Public Service Commission secretary, Ambassador Jonathan Wutawunashe told The Herald that civil service salary negotiations are nearing finalisation.
“Salaries have to improve and the Government is still committed to that. The National Joint Negotiating Council and representatives of Government are meting this week for consultations.
“Our local currency is now firm on the market after the auction system introduced by the Government to curtail the marketplace distortions and it boosts the negotiation process,” said Ambassador Wutawunashe.
He said there was still no decision on the US dollar Covid-19 allowances, though Government was committed to continue paying it.
“There was a proposal to continue paying the US$75 allowance and the US$30 for pensioners. The Government has not accepted or rejected that proposal but it is still being negotiated.
“Government has looked at all possible formulas to sustain the civil servants, and it is committed to taking care of their welfare, so any adjustment will be determined by the outcome of the negotiations.
Government expected negotiations to end before the end of this month.