News / National
Boost for ZSE as govt suspends tax on stocks
02 Jul 2024 at 01:36hrs | Views
Government has implemented significant tax reductions and suspensions aimed at revitalizing trading activity on the Zimbabwe Stock Exchange (ZSE).
The 40% capital gains tax (CGT) on stocks sold on the ZSE has been suspended, alongside a reduction in the capital gains withholding tax from 4% to 2% for all trades over the next six months. These measures are intended to lower the cost of selling stocks and stimulate faster trading on the exchange, which has seen a drastic decline in daily trades, plummeting by 92% to only 80 trades due to previous tax constraints.
Anymore Taruvinga, CEO of the Securities and Exchange Commission of Zimbabwe (SecZim), announced these changes following discussions with the Ministry of Finance. He highlighted that the suspension of the CGT and the reduction in withholding tax were crucial steps to attract investors back to the market. Additionally, the Treasury has approved the lifting of the 180-day vesting period, further facilitating quicker stock sales.
Looking ahead, Taruvinga emphasized SecZim's commitment to stabilizing the market through initiatives such as enhancing the Stochastic Momentum Index (SMI), ensuring investor protection through legislative amendments, and participating in national financial development strategies. Despite challenges like liquidity shortages across the ZSE and the Victoria Falls Stock Exchange (VFEX), 2023 saw nominal turnover grow significantly to ZWL726.3 billion, though in US dollar terms, it declined by 56% to US$198.32 million.
Despite these challenges, new licenses were issued in various market sectors, including security advisories and collective investment schemes, reflecting some resilience and growth within Zimbabwe's capital markets amid ongoing economic pressures.
The 40% capital gains tax (CGT) on stocks sold on the ZSE has been suspended, alongside a reduction in the capital gains withholding tax from 4% to 2% for all trades over the next six months. These measures are intended to lower the cost of selling stocks and stimulate faster trading on the exchange, which has seen a drastic decline in daily trades, plummeting by 92% to only 80 trades due to previous tax constraints.
Looking ahead, Taruvinga emphasized SecZim's commitment to stabilizing the market through initiatives such as enhancing the Stochastic Momentum Index (SMI), ensuring investor protection through legislative amendments, and participating in national financial development strategies. Despite challenges like liquidity shortages across the ZSE and the Victoria Falls Stock Exchange (VFEX), 2023 saw nominal turnover grow significantly to ZWL726.3 billion, though in US dollar terms, it declined by 56% to US$198.32 million.
Despite these challenges, new licenses were issued in various market sectors, including security advisories and collective investment schemes, reflecting some resilience and growth within Zimbabwe's capital markets amid ongoing economic pressures.
Source - newsday
