11 days after the Minister of Finance announced that there will be a revised tax on all electronic financial transactions in Zimbabwe, the new regulation is now enforceable. We are all going to be 2% poorer.
When Mthuli Ncube first announced the introduction of this tax, he said that it was going to be with effect from the 1st of October 2018. However, it emerged that he could not legally do so since a ministerial statement does not change the law in Zimbabwe. The only way the tax could become legal would be after gazetting by government.
It has happened. Today’s government gazette includes the announcement of the new 2% tax on electronic transactions. According to the gazette, the new tax is with effect from tomorrow:
These regulations may be cited as the Finance (Rate and Incidence of Intermediated Money Transfer Tax) Regulations, 2018….
With effect from the day after the promulgation of these regulations. section 22G the Finance Act [Chapter 23:04] is repealed and the following is substituted: “”22G Intermediated Financial Transactions Tax With effect from the day after the promulgation of these regulations, the intermediated money transfer tax chargeable in terms of section 36G of the Taxes Act shall be calculated at the rate of zero comma zero two United States dollars on every dollar transacted for each transaction on which the tax is payable: Provided that if a single transaction on which the tax is payable is equivalent to or exceeds five hundred thousand United States dollars, a flat intermediated money transfer tax of ten thousand United States dollars shall be chargeable on such transaction.”
There you have it. There is no cash in Zimbabwe and we will still continue to predominantly use electronic channels for payment even though it’s more expensive to do this now, significantly more expensive than it was before.
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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