By Own Correspondent
The 2022 national budget has widened the tax relief band for retrenches in a bid to cushion value in the wake of rising inflation and job losses.
Presenting the blueprint this week, Ncube said the decision was prompted by the realisation that many citizens are being forced out of jobs.
“Government recognises that a number of employees have been retrenched as employers adopt cost rationalisation strategies, in response to the negative effects of the COVID-19 Pandemic.
“In order to preserve value of retrenchment packages, I propose to review non-taxable portion of the local currency tax-free threshold from the greater of $50 000 or 1/3 of the retrenchment package, whichever is higher, up to a maximum of $240 000, to the greater of $400 000 or 1/3 of the retrenchment package, whichever is greater, up to a maximum of $2 million, for income earned in local currency,” he said.
He also moved to employ tax credits for employing physically challenged persons.
“The NDS1 thrust is to protect vulnerable groups through new interventions and enhancement of existing programs, since people living with physical challenges face significant barriers to employment,” he said.
In line with the above, he therefore proposed to introduce a tax credit of US$50 or local currency equivalent per additional employee recruited per month for corporates that employ physically challenged persons.
“The credit will, however, be limited to a maximum of US$ 2 250 per year of assessment,” he said.
These measures take effect from 1 January 2021, however, critical stakeholders have not yet submitted any reactions to this effect.
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