The stability of Zimbabwe’s new currency, the ZiG, has led the authorities to scrap a rule in place since 2022 that requires investors in the country’s main stock exchange to hold on to shares for a period of 180 days or risk paying a higher capital gains tax.
The rule was introduced to deter speculation on the Zimbabwe Stock Exchange. At the time, the Harare stock exchange was one of the few investment options in the southern African country for investors to protect themselves against volatile exchange rates and inflation. The country’s dollar, which ZiG replaced in April, regularly depreciated against the greenback.
Since the ZiG, the country’s sixth attempt to create a stable local currency in 15 years, began trading on 8 April, it has appreciated 0.5% against the dollar, to 13.49%, according to central bank data.
The measure is aimed at strengthening the capital markets, said George Guvamatanga, Secretary of Finance and Economic Development.
“These are measures that the government is taking to support the local currency, the ZiG, and reflect the state’s strong confidence in the full restoration of a fully market-orientated economy,” said Guvamatanga. The new capital gains tax has been set at 2 per cent, instead of 4 per cent, and will be reviewed after six months, he stressed. The Zimbabwe Securities and Exchange Commission has been informed of the changes.
Meanwhile, Justin Bgoni, chief executive of the Zimbabwe Stock Exchange, welcomed the suspension of the vesting period, saying it was something the capital markets had wanted for a long time.
Source: O Económico
