THE Zimbabwe Stock Exchange Limited (ZSE) has announced a 2 percent capital gains withholding tax, effective from June 28.
The change is expected to have significant implications for investors and market participants and may impact the overall performance of the stock market in Zimbabwe. Capital gains withholding tax rate is the percentage of tax taken out by the payer for example a brokerage from the profit made on selling investments such as stocks or real estate, before paying the rest to the investor.
In a recent statement, Zimbabwe Stock Exchange Limited (ZSE) chief executive officer, Mr Justin Bgoni, announced that capital gains tax will not apply to listed marketable securities for a specified period.
“The rate of capital gains withholding tax on listed marketable securities shall be set at 2 percent with immediate effect on all trades,” said Mr Bgoni.
Mr Bgoni urged stakeholders to take note of the new Statutory Instrument 110 of 2024, which amends the Finance Act. The Minister of Finance and Economic Development and Investment Promotion (MoFEDIP) has made significant adjustments to transaction costs on Zimbabwe Stock Exchange (ZSE) listed securities through this instrument.
“These adjustments are to be implemented immediately for a period of six months, serving as an assessment period for the Government. Therefore, these adjustments will apply to trades executed on the ZSE from June 28 to December 28, this year.”
