2.5% ‘civil servants’ tax clarified
Finance Minister Mthuli Ncube Wednesday announced the government would be deducting 2.5% from civil servants who opt to participate in this voluntary scheme he called a new loans-centred initiative to protect the public servants from loan sharks.
There was confusion as to whether the 2.5% tax was compulsory or voluntary as a Tweet from the Ministry of Information and Publicity has indicated that the deduction was compulsory, however, Ncube clarified that the Tweet was not correct as the 2.5% was voluntary. Most news outlets had indicated that the tax was compulsory.
Mthuli Ncube the clarified
Buhera South legislator, Joseph Chinotimba (Zanu PF) has since requested that Ncube come to Parliament to explain why Treasury wanted to levy a 2,5 percent tax only to civil servants.
Chinotimba said in his view as a former trade union leader, it was not prudent to deduct 2,5 percent tax only from civil servants saying if it was not properly explained it might cause restlessness among citizens.
He said this in the National Assembly where he rose on a point of Privilege to raise concern on the manner in which the 2,5 percent wanted to be implemented.
The Public Service Commission has since released a statement on the establishment of the Government employees mutual savings fund.
Below is the statement:
PRESS STATEMENT BY THE PUBLIC SERVICE COMMISSION ON THE ESTABLISHMENT OF THE GOVERNMENT EMPLOYEES MUTUAL SAVINGS FUND (GEMS FUND)
1.0 GEMS is a voluntary scheme that mobilises savings by Government employees for the purpose of wealth creation to benefit those Civil Servants while still serving as well as post-employment;
2.0 GEMS is a Fund from which Civil Servants can benefit through concessional loans to assist them with wealth creation projects and other requirements;
3.0 A contribution of 2.5% of basic salary will be made by Civil Servants who opt to participate in this voluntary scheme;
4.0 Government has provided seed capital of ZWL $100 million with the possibility of the amount being doubled to ZWL $200 million to support Civil Servants by kick-starting the scheme;
5.0 Since GEMS Is being launched as a facility for wealth creation, upon termination of employment members can withdraw the totality of their contribution with accrued interest;
6.0 GEMS is being Introduced as part of the expanding portfolio of benefits to support the livelihoods of Civil Servants;
7.0 The Public Service Commission has been greatly encouraged by the strong support given to this and other such Initiatives by the Office of the President and Cabinet and the Ministry of Finance and Economic Development in the context of the Tripartite which comprises the Office of the President and Cabinet, the Public Service Commission and the Ministry of Finance and Economic Development;
8.0 Appreciation must be recorded for the swift and decisive manner in which Cabinet considered and approved the GEMS initiative, a scheme that fosters a culture of savings;
9.0 Another, separate initiative approved on the same day by Cabinet is the operationalisation of Garrison Shops for the Uniformed Services, namely Zimbabwe Defence Forces; Zimbabwe Police Service and the Zimbabwe Prisons and Correctional Service to ensure convenient access to reasonably priced commodities;
10.0 These Garrison Shops are based on a self-financing model as they entail selling of goods to customers;
11.0 Logistical arrangements relating to the operationalisation of Garrison Shops are being worked out;
12.0 Civil Servants will benefit from SILO Shops which will also operate on the basis of affordable pricing of commodities.