Civil servants’ US$300 cushioning allowance to be taxed

GOVERNMENT will convert the US$300 Covid-19 cushioning allowances paid to civil servants into a salary beginning January 2024 while introducing a two-cent taxation on sugary beverages including alcohol.

The taxation on sugary beverages is meant to increase their cost and promote reduction on their consumption as the country aims to minimise the risk of contracting non communicable diseases.

Government introduced a US$75 Covid-19 cushioning allowance in 2020 and has progressively increased it to US$300 but since it was an allowance, it was not subjected to taxation.

Presenting the 2024 National Budget, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said Treasury will convert the Covid-19 allowance into a salary.

He said effectively on January 1 next year, the Government will review strategic fuel reserve levy as well as passport fees, Central Vehicle Registry fees as it seeks to broaden resources to finance road infrastructure.

“I propose to review upwards, the Strategic Reserve Levy by US$0.03 and US$0.05 per litre of diesel and petrol, respectively,

With effect from 1 January 2024,” he said.

“I, further, propose that passport and selected fees charged by the Central Vehicle Registry be increased, with effect from 1 January 2024. Additional revenue generated from the above measures will be ring-fenced towards road infrastructure development.”

Prof Ncube said Treasury will introduce a Wealth Tax for property owners whose value is worth US$100 000 to ensure every person contributes to the fiscus in line with their levels of income.

Prof Ncube said the funds generated from this taxation will be channelled towards improving service delivery in urban areas.

“I propose to introduce a Wealth Tax levied at a rate of 1 percent of market values of residential properties with a minimum value of US$100 000. Resources derived from the levy will be ring-fenced towards urban infrastructure development, in particular roads, water, sewer and community health centres. Principal Private Residential properties owned by elderly persons above 70 years will, however, be exempt from the tax,” he said.

He said to address the growing illicit trade in manufacturing of cigarettes, the Government will introduce a digital platform that provides real-time, traceable and authentic data on locally manufactured goods that would be beneficial to the Fiscus.

“Government, will, thus, explore the implementation of a digital platform on locally produced goods, in particular, cigarettes,” he said.-chronicle