The issue of the high tax on electronic transactions just won’t die. Here is a statement from Mthuli Ncube, the Minister of Finance and Economic Development:
PRESS STATEMENT BY THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT, HON. PROF. MTHULI NCUBE ON THE INTERMEDIATED MONEY TRANSFER TAX
At the occasion of the presentation of the 2018 Mid-Term Monetary Policy, I announced a review of the Intermediated Money Transfer Tax from the current 5 cents per transaction to 2 cents per every dollar transacted. Further details pertaining to the tax are as follows:
The 2 Cents per Dollar tax, will apply on transactions of $10 and above only. Transactions below $10 will be exempt from this tax. There is a cap of $10 000 on the amount of tax to be paid. This implies that transfers above $500,000 will attract a flat tax of $10,000.
In addition, the following transactions will be exempt from the proposed tax:-
• Intra-company transfer of Funds including transfer from intermediary accounts;
• Transfer of funds on purchase and sale of equities;
• Transfer of funds on purchase and redemption of money market instruments;
• Transfer of funds for payment of salaries;
• Transfer of funds for payment of taxes;
• Transfer of funds to intermediary accounts, for example, conveyancers;
• Transfer of funds in respect of foreign currency related payments; and
• Transfer of funds by Government.
This tax review comes into effect on the date of gazette of the relevant Regulations.
Hon. Prof. Mthuli Ncube Minister of Finance and Economic Development
It’s welcome that there is a floor and a ceiling to this new tax. However, the tax is still too high considering one is already taxed elsewhere. That the minister wants to collect from people who are outside of the tax radar is a good thing but it is quite punitive on all of us.
At least maybe the minimum should have been higher than that.
It looks like Ncube has now been advised more properly of the legal way to do this. He now says the tax will become effective on the day of gazetting. This is because his earlier pronouncement that the tax was effective 1 October was illegal.
He did not give any indication of whether this is a permanent arrangement or not. I guess until further notice, our pay has just been reduced by 2%.
The issue of cash
To avoid people flooding banking halls, the minister might as well tax cash withdrawals even more. As it is, it is cheaper to queue for the little cash one can get and from then on it is free to pay your way around using cash.
Reminder: You can buy the Techzim Insights Report on the Zimbabwe Payments sector for just $4.99 (at least this is below $10). You can pay for it via EcoCash below and it gets sent to your email inbox immediately:
Buy the The Payments Systems Environment In Zimbabwe Report now for US$9.99 ONLY using EcoCash.
Check your phone and enter your EcoCash PIN to confirm the transaction.
If you are on a smartphone and the payment is not working, please click this link and try payment again once. Please note that this is a new payment method so if you encounter a problem, get in touch with us on WhatsApp by clicking this link.
Professor Mthuli Ncube is the Minister of Finance and Economic Development.He was the Chief Economist and Vice President of the African Development Bank ,financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland and... Read More About Mthuli Ncube