Zim Govt to introduce tax cuts on earnings
Government is considering to implement tax cuts on wages and salaries to stimulate workers’ buying power, it has been learnt.
This is being discussed under the Tripartite Negotiation Forum (TNF), a social dialogue platform that brings together Government, business, and labour to discuss socioeconomic matters.
It was formed in 1998, initially as a voluntary forum, but later legislated through the Tripartite Negotiating Forum Act of 2019.
“The authorities will consider tax cuts on wages and salaries to increase disposable incomes. It is recommended that fair distribution of incomes should become a policy and planning imperative, Employers Confederation of Zimbabwe (Emcoz) said in an update on the TNF.
It also said a guide was provided to all bargaining platforms across all sectors to strive towards pegging the minimum wage at US$150 payable either in local currency or at the prevailing inter-bank rate.
“The import of this is that sectors are encouraged or persuaded to use the US$150 benchmark as a guide in their engagements taking into account the peculiarities of each sector. The guideline will be reviewed in the first quarter of 2023,” said Emcoz.
It said social partners were directed to work towards the conclusion of a social contract or pact to help promote the stabilisation of the economy.
“The social contract is the key for moderating increases in prices of goods and services as well as restrain increases in salaries and wages to counter inflationary measures,” Emcoz said.
In June this year, a technical committee met in Mutare where the parties to the TNF came up with positions, but sharp differences emerged over the national minimum wage, pricing of goods and services, and payment of wages in United States dollars.
Labour demanded a minimum wage be negotiated at a national level and partly paid in forex, citing erosion of earnings due to inflation and exchange rate distortions.
The Government and business, on the other hand, argued that negotiations for wages should be done at a sector level. This almost threaten the revival of the TNF.-ebsuinessweekly
