According to President Mnangagwa the government will soon review the two percent tax on electronic money transfers so as “to make it sensitive to the needs of both business and consumers.”
Since its introduction by the Ministry of Finance the tax has not won any fans. Many people have complained that consumers and businesses are already suffering and therefore ought to be spared from further taxation. The tax has also been blamed for the all round price hikes of basic commodities and made it more expensive to use Eocash which has now become Zimbabwe’s de facto currency ever since we had the cash crisis.
What the President said exactly
Government took to heart the cry that the two percent transactional tax has compounded the tax burden for both business and for the consumer. Once the legal instrument we are crafting against unexplained wealth and deposits is in place, new measures will be announced to review the tax which, among other considerations, had been occasioned by illicit activities in the financial services sector.
There is no timeline
While many of us would prefer to have the tax scrapped outright it seems that’s not going to happen anytime soon. What the president is suggesting is that the law will be fine tuned and made better although it’s not yet clear what that fine tuning will entail.
It’s not also clear when this fine tuning will be done. All we know is this will only take place after the government has cleared its plate with priority being the law on “unexplained wealth”. I sort of suspect this review will come when the next budget announcement is made which is expected on 22 November.