The Minister of Finance and Economic Development, Professor Mthuli Ncube says the government has come up with a Youth Employment Tax Incentive (YETI) to promote employment of many jobless youths in the country.
The tax incentive will be issued to companies that hire young people.
Speaking in Parliament this Thursday while presenting the ZWL$58, 6 billion 2020 National Budget, Professor Ncube said the measure comes into effect on the 1st of January 2020.
He said the YETI will aid in reducing an employers’ cost of hiring young people through a cost-sharing mechanism.
“Under the 2020 Budget, a fiscal incentive is being introduced to support employers who generate jobs for our young job seekers.
“Any additional job created will attract a percentage tax credit to the employer,” said the Minister.
The Finance and Economic Development Minister highlighted that to operationalise YETI, his ministry would work closely with the Zimbabwe Revenue Authority, Ministry of Justice, Ministry of Labour, Employers Confederation of Zimbabwe and other relevant stakeholders to work out the respective legal and administrative framework.
“Mr. Speaker Sir, I have already alluded to the need for tax incentives in support of job creation, which is key to sustainable economic development, I therefore, propose to introduce a tax credit of ZWL$500 per month per employee for corporates that employ additional employees in a year of assessment,” said Ncube.
“The credit will, however, be limited to a maximum of ZWL$60 000 per year of assessment.”
Ncube also explained how companies can have access to this fund.
“The company should be registered for Personal Income Tax and compliant for the preceding tax period; tax credit will only be claimed after the additional employee has served a period of 12 consecutive months; employees should be aged 30 years and below at the time of employment.
“For the purposes of the incentive, “employee” excludes a trainee, intern and apprentice; the minimum wage payable to new employees should be at least ZWL$2 000 per month; the tax credit will not apply to supervisory grades; and the tax credit will not apply to corporates with a turnover exceeding an equivalent of US$1 million.
The Bulk of youths are unemployed in Zimbabwe with universities and colleges churning out graduates that fail to secure jobs.
Unofficial statistics of youth unemployment rates are pegged at over 80 percent.