ZTIWU Petitions: Zimbabwe Tax-Free Threshold Increase to US$400

• The Zimbabwe Tobacco Industrial Workers Union (ZTIWU) petitioned Finance Minister Mthuli Ncube to raise the tax-free threshold to US$400.
• The current personal income tax-free threshold is US$100 for foreign currency earners and ZWG2,800 for local currency earners.
• ZTIWU argues that the increasing cost of living necessitates this change to help workers meet basic needs.
• The union also requested a PAYE exemption for employees earning US$400 per month or less.
• Income above current thresholds is subject to PAYE rates of 20-40% plus a 3% AIDS Levy.

For lawyers and compliance officers in Zimbabwe, the upcoming 2027 National Budget presentation will be a critical event to monitor closely.

The Zimbabwe Tobacco Industrial Workers Union (ZTIWU) recently submitted a formal petition to Finance Minister Mthuli Ncube, urging a significant adjustment to the nation's personal income tax-free threshold. The union's request, conveyed in a letter dated November 11, 2026, specifically calls for the threshold to be raised to US$400 in the upcoming 2027 National Budget Presentation. This proposed change represents a substantial increase from the current tax-free limits, which stand at US$100 for individuals earning in foreign currency and ZWG2,800 per month for those paid in local currency.

Emmanuel Mariro, the Secretary General of ZTIWU, articulated the union's appeal directly to the Treasury, highlighting the pressing need for financial relief for the country's workforce.

ZTIWU's proposal is primarily driven by the escalating cost of living, which the union asserts places considerable financial strain on ordinary workers and their families across Zimbabwe. Mariro emphasized that numerous employees are struggling to cover fundamental household necessities, including food, housing rentals, school fees, transportation, and healthcare. The union firmly believes that individuals with lower incomes should be permitted to retain a greater portion of their earnings to maintain a reasonable standard of living. They argue that the current taxation system should not disproportionately burden workers whose incomes are already insufficient to meet their basic needs.

Beyond the tax-free threshold, the union also implored the Treasury to consider exempting employees earning US$400 per month or less from Pay As You Earn (PAYE) and other tax obligations, advocating for a more progressive taxation system that safeguards vulnerable employees while ensuring equitable revenue collection.

Under the existing tax regulations in Zimbabwe, any income earned above the established tax-free thresholds is subject to Pay As You Earn (PAYE) tax. These PAYE rates vary, ranging from 20% to 40%, depending on the income bracket. In addition to the standard PAYE, a 3% AIDS Levy is also applied, calculated on the total tax payable.

This structure means that once an individual's earnings surpass the US$100 or ZWG2,800 monthly limits, a significant portion of their additional income is directed towards these taxes. The ZTIWU's petition directly challenges the adequacy of these current thresholds, suggesting they no longer align with the economic realities faced by the majority of the working population. The union maintains that while it does not oppose taxation in principle, it advocates for a balanced system that acknowledges the financial pressures on low-income workers.

Granting the requested US$400 tax-free threshold would offer meaningful financial relief to workers, potentially enhancing their welfare and strengthening household purchasing power. ZTIWU contends that such a measure would also contribute positively to social and economic stability within the nation. The union views workers as the essential backbone of Zimbabwe's economy, contributing through their labor, productivity, and taxes, and therefore deserving of policies that protect their purchasing power and dignity.

For lawyers and compliance officers in Zimbabwe, the upcoming 2027 National Budget presentation will be a critical event to monitor closely. Any adjustments to the personal income tax-free threshold or PAYE rates could significantly impact employee compensation structures, necessitate revisions in payroll calculations, and alter tax compliance obligations for employers across various sectors. The ZTIWU has expressed its commitment to ongoing constructive engagement and dialogue with the government and other stakeholders to pursue policies that foster decent work, social justice, and economic development.

Lawyers and compliance officers in Zimbabwe should monitor the upcoming 2027 National Budget for potential changes to the personal income tax-free threshold and PAYE rates, as any adjustments could significantly impact employee compensation, payroll calculations, and tax compliance obligations for employers.

Source: Original reporting via New Zimbabwe