The Zimbabwe government Wednesday raised the tax-free income thresh hold for workers 25-fold to Z$25 billion (ZW$2.2 billion=US$1), citing a sharp increase in the cost of living, driven up by hyper-inflation.
In a statement, Finance Minister Samuel Mumbengegwi said the tax relief, from Z$1 billion, was intended to put more disposable income in the hands of struggling workers, and takes immediate effect.
This comes against the background of rising prices of goods and services due to hyper-inflation in the country.
At the last official count in February, year-on-year inflation was 165,000 percent, but economists say this had now risen to over one million percent.
The tax relief also comes ahead of a key election at the end of the month, and may have been timed to improve the government’s electoral chances.
President Robert Mugabe will lock horns with main opposition challenger Morgan Tsvangirai in a presidential run-off 27 June, after an earlier election in March failed to produce a winner.
The government has also this month sharply increased the salaries of civil servants, in some cases by more 1,000 percent, a move seen in some circles as a vote-buying gesture.