Mthuli Ncube Introduces US$50 “Tax” On Imported Mobile Phones
Minister of Finance and Economic Development Mthuli Ncube has introduced a US$50 tax on imported mobile phones. The minister announced the US$50 levy as part of the government’s revenue-enhancing measures during Thursday’s 2022 National Budget presentation.
According to the Finance Minister, he introduced the “Levy on New Cellular Telephone Handsets” to curb tax evasion. Ncube said the measure is necessary, arguing that there is rampant evasion of customs duty because mobile phones are easy to conceal.
Imported mobile phones are supposed to pay a customs duty of 25 percent. The Finance Minister proposed that in future, the US$50 levy will be collected before registration of new cellular handsets by Mobile Network Providers.
Announcing the new tax on mobile phones during the 2022 National Budget presentation, Minister Mthuli Ncube said,
Mr Speaker Sir, whereas imported cellular telephone handsets attract modest customs duty of 25%, the funds realised, however, point to evasion of the customs duty due to the nature of the items, which can easily be concealed.
In order to curb tax evasion, I propose to introduce a levy of US$50 which will be collected prior to registration of new cellular handsets by Mobile Network Providers.
The minister said that the US$50 is refundable on the condition that the owner of the mobile phone can provide proof that they paid the requisite customs duty for the device. The Zimbabwe Revenue Authority will process the refund within 30 days of receiving the receipt from the mobile network operator.
However, where duty would have been paid, the Zimbabwe Revenue Authority will provide a refund of the levy within 30 days of receipt of payment from the mobile network operator.
The minister also raised the tax-free threshold on personal income from ZWL $10 000 to ZWL $25 000.
Higher than projected wage reviews during the course of 2021 by government and some private sector employers has pushed a number of taxpayers into higher income tax brackets resulting in bracket creep and a higher tax burden.
In order to provide relief to taxpayers and also boost aggregate demand for goods and services, I propose to adjust the tax-free threshold from ZWL 10 000 to ZWL 25 000 and also adjust the tax bands to end at ZWL 500 000 above which a marginal tax rate of 40% will apply,
with effect from 1 January 2022.
Ncube also raised the local currency tax-free bonus threshold from ZWL$25 000 to ZWL$100 000. The tax-free bonus threshold for foreign currency was increased from US$320 to US$700. Said Ncube:
I also propose to review the local currency tax-free bonus threshold from ZWL 25 000 to ZWL 100 000 and the foreign currency tax-free bonus threshold from US$ 320 to US$ 700, with effect from 1 November 2021.
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