Omega Ukama 
THE treasury has suspended implementation of statutory instrument (SI) 130A of 2022 made by President Emmerson Mnangagwa last month, due to some errors in the statute.
The decree, which was announced on the 27th of last month, was meant to enforce, among other things, the prohibition of third-party funding for trades on the Zimbabwe Stock Exchange (ZSE), prohibition of withdrawal of sell proceeds or client funds to third parties, as well as the prohibition of inter account movement of funds or purchasing power amongst clients of a stockbroking firm.
ZSE chief executive, Justin Bgoni
ZSE chief executive Justin Bgoni said the treasury informed the exchange that it needs to correct parts of the SI.
“Therefore, stakeholders are advised to operate on the basis of Statutory Instrument 72 of 2022 until further notice. However, kindly take note that trades executed between 27 and 31 May 2022 will be levied on the basis of SI 103A of 2022.”
Some of the measures being enforced by the statute are meant to deter speculative activity on the bourse, which the president says has been driving inflation, which rose to 131,7 percent in May, from 96,4 percent in April.
The statutory instrument also reduced brokerage fees to 0,765 percent and increased ZSE and Securities and Exchange Commission of Zimbabwe levies to 0,25 percent and 0,2 percent per trade respectively.
There had also been an error in Mnangagwa’s capital gains tax (CGT) review pronouncement. The government has since cleared the air on the confusion created by that error.
He had said capital gains tax on shares held for less than 270 days was being raised from 20 percent to 40 percent to deter short-term speculation on the market, but SI 96 of 2022, which was published after the pronouncement, said the tax was, in fact, being raised from two percent to four percent.
“The announcement speaks to an increase in CGT from 20 percent to 40 percent applicable to holders who sell shares within a 270-day period, however as far as we are aware there was never a 20 percent CGT tax on equities in the first place, just a two percent withholding tax …
“As a market we are therefore unsure whether this represents a new 40 percent CGT now being introduced at this point. This sadly leads to confusion and the need for further policy pronouncements,” an investment analyst at a local securities firm, IH Securities, Lloyd Mlotshwa told The Financial Gazette soon after the initial pronouncement.
Meanwhile, economic experts have expressed concern over the government’s constant policy vacillations, saying this “did not only dampen investor confidence generally, but also had the effect of weakening the economy.”
