Civil servants seek salary talks to address taxation of COVID-19 allowance
Civil servants in Zimbabwe have expressed their intention to engage in salary negotiations with the government in an effort to find common ground and ensure that the recently converted US$300 COVID-19 cushioning allowance, which has now been transformed into a salary, is not subjected to taxation.
During the presentation of the 2024 National Budget last month, Professor Mthuli Ncube, the Minister of Finance, Economic Development, and Investment Promotion, announced that the US$300 COVID-19 cushioning allowances provided to civil servants would be converted into a salary starting from January 2024. However, this conversion would make the allowances taxable, thereby reducing the disposable income of civil servants.
Cecilia Alexander, President of the Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU), applauded the government’s decision to convert the COVID-19 allowance into a salary. However, she emphasized the need to negotiate the tax aspect of the conversion. Mrs. Alexander stated, “As civil servants we commend the Government for converting the US$300 Covid-19 allowance into salary. We are, however, going to negotiate for the salary to come as it used to without being taxed to increase our disposable income.”
Mrs. Alexander raised concerns that the taxation of the allowance could worsen the financial situation for civil servants. She confirmed that discussions regarding this matter would take place during the National Joint Negotiating Council (NJNC) meeting, which is scheduled to convene in the first week of January. Although the meeting was initially planned for this year, it was postponed due to prior commitments. Mrs. Alexander assured that they would meet with the government early in January to negotiate the issue of salaries.
The COVID-19 cushioning allowance was introduced by the government in 2020, starting at US$75 and later increased to US$300. Being an allowance, it was not subject to taxation. This allowance played a vital role in assisting civil servants in coping with the economic hardships caused by factors such as exchange rate volatility and hyperinflation over the past three years.
Civil servants have been advocating for the government to raise their salaries to pre-October 2018 levels, which stood at US$540 per month for the least-paid employee.
Mrs. Alexander expressed satisfaction with the annual bonuses received by civil servants in November and December, highlighting that the government has been fulfilling its promises to improve the welfare of government workers.
The upcoming negotiations between civil servants and the government will be crucial in addressing the issue of taxation on the converted COVID-19 allowance. The outcome of these talks will determine the potential impact on the disposable income of civil servants and shape their financial well-being moving forward.
