Zimbabwe Stock Exchange Announces Changes to Capital Gains Tax

Zimbabwe Stock Exchange Announces Changes to Capital Gains Tax. Zimbabwe Stock Exchange (ZSE) has announced certain amendments to the capital gains tax regime, effective immediately.

As part of the government’s efforts to encourage investment and promote economic growth, the ZSE has made some important changes including cutting the capital gains withholding tax rate from 5% to 2% on listed marketable securities.

Consequently, investors will now pay a final tax of 2% on the sale of listed securities, effective immediately.

Additionally, the capital gains tax exemption has been extended to listed marketable securities for a period of six months, effective from June 28, 2024, to December 28, 2024.

This means that investors will not be subjected to paying capital gains tax on trades executed during the stated period.

The government has also suspended the 40% capital gains tax (CGT) on stocks sold on the Zimbabwe Stock Exchange (ZSE) to reinforce trade on the bourse.

The moratorium placed on CGT and the reduction in capital gains withholding tax means stocks can now be sold at a much lower cost and at a quicker rate on the ZSE during the six months.

According to the ZSE Chief Executive Officer, Justin Bgoni, these changes are a great idea, as they will have a positive impact on the market and motivate more investors to participate.

In its yearly general meeting last Friday, the Securities and Exchange Commission of Zimbabwe (SecZim) chief executive officer Anymore Taruvinga mentioned that the Treasury had also approved removing the vesting period of 180 days.

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Zimbabwe Stock Exchange Announces Changes to Capital Gains Tax: A move which will enable the faster sale of stocks.

According to him, going forward, the commission would be concentrating on Stochastic Momentum Index (SMI) stability, investor protection, market development and recapitalisation plan.

Regarding the regulations, the Minister of Finance, Economic Development and Investment Promotion Mthuli Ncube has made the following changes:

Repealed paragraph (a)(iii) of section 38 of the Finance Act, which covered the rates of capital gains tax.

Amended section 39 of the Finance Act by repealing paragraph (a) and replacing it with a new paragraph that sets the capital gains withholding tax rate at 2% of the sale price for listed marketable securities.


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