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Oliver Kazunga, Senior Business Reporter
THE Zimbabwe Stock Exchange (ZSE) has announced an increase to two percent in capital gains withholding tax effective this month in line with the 2022 fiscal policy framework.

The Government through the Ministry of Finance and Economic Development had laid the framework for the new tax regime in the Finance Bill.

“In terms of the Finance Bill, H.B. 16, 2021, with effect from the 1st of January, 2022, Section 39 (Rates of capital gains tax withholding tax) of the Finance Act [Chapter 23:4] was amended by the repeal of paragraph (c) and the substitution of— “(c) in the case of a sale of a marketable security that is a listed security, one comma five per centum of the price at which the security was sold if such security was held for at least six months on the date of its sale, or two per centum of the price at which the security was sold if such security was held for less than six months on the date of its sale”.

It is in this context that the ZSE has announced the increase in capital gains withholding tax.

“With effect from 1 January 2022, the default capital gains withholding tax on ZSE listed securities will be set to 2 percent and investors are advised to seek guidance from their stockbroker if the securities they sell were held for at least six months,” it said.

Before selling their securities, the stock exchange said clients can send an email on the ZSE Direct, a digital platform, which allows individuals in the country to participate on the bourse.

The ZSE Direct was launched in September 2020.
Following the launch of the platform, the ZSE was working with different institutions to increase access to the platform by retail investors.

Since the launch of the ZSE Direct, the platform targets to register at least 7 000 active participants that were on the Central Securities Depository as of June 2020.

When the country adopted the local currency, the ZSE lost quite a number of foreign investors on the market and a buffer of local investors is always needed to support the domestic capital markets. — KazungaOliver