Story by Stanley James, Business Editor
Investor participation on the Zimbabwe Stock Exchange (ZSE) is expected to increase this year after government reduced the capital gains withholding tax on the selling of shares to one percent.
The capital gains withholding tax on selling shares has been slashed from 2 percent to 1 percent with immediate effect, amid optimism the development will result in investors realising more returns from the sale of their shares.
The arrangement has been described by market watchers as government’s commitment towards the growth of local capital markets.
“It is entirely premised towards reducing the cost of doing business while enabling investors to realise more, so the net effect is to attract more investors participation, while enabling the local market to play a vital role in economic growth,” said an economist, Mr Ignatious Matungamire.
“Definitely investors will benefit remember there has been an outcry in as much as the tax had been creating challenges in terms of smooth share deals. So, going forward, it brings relief and at the same time facilitates increased growth of the economy and unlocks value to shareholders,” said CEO of Securities and Exchange Commission of Zimbabwe, Mr Anymore Taruvinga.
During the past few months, market players submitted proposals to treasury over the reduction of the tax as part of reforms to bolster confidence on the ZSE.
The reduction in the tax is also expected to improve competitiveness of the local bourse against regional peers and drive Zimbabwe’s agenda of increasing global capital flows.
