TAX MATTERS: Statutory rate for Z$ employer loans goes up

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UNDER the current difficult economic environment, employers may wish to cushion their employees by giving them loans where financial institutions are hesitant to do so because of the high default rate.
A further advantage of employer provided loans is that they are cheaper than the traditional bank loans. Employer loans are also valuable to some employees who may not qualify for these traditional loans, making them a source of help when no other avenue is available. Employees also like this benefit because payments can be made through automatic payroll deductions, making them simple and administration-efficient compared to loans accessed through banks.

According to the strict letter of the law, a tax charge will arise where a director or employee obtains a benefit by reason of their employment when they, or any of their relatives, is given a cheap or interest-free loan.