Since the government is finding it quite hard to get funding from the international community, it’s turning to measures like the Intermediated Money Transfer (IMT) tax to raise funds internally. And it is cashing in some good money from the 2% tax as shown in the ZIMRA 4th Quarter Report. From October, when the 2% tax was introduced much to people’s anger, to 31 December 2018, government pocketed an astounding $166.15 million.
This $166.15 million collected in just 3 months is 9 times more than what the government collected in the whole of 2017 when the IMT tax was still 0.05 cents per transaction (government collected $18.69 million from the IMT of 5 cents per transaction in 2017). The simple fact that the IMT tax is now being charged per dollar rather than per transaction is the reason why 3 months’ worth of tax is more than what was collected in the whole of 2017.
In addition to the $166.15 million it collected in 3 months (when the IMT was now 2%), $11.12 million was collected in the first 9 months of 2018 (when the IMT was 5 cents per transaction) which brings the total revenue collection in 2018 of the IMT to 177 million. According to one report, the government is expected to rake in $600 million in 2019 from the 2% IMT. That’s a lot, isn’t it? But hey, a good amount of that money will be put to a very good (necessary) use if the words of the Finance Ministry are to be believed. The Ministry says the money will be largely used to rehabilitate water and sanitation infrastructure-a noble use.
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6 comments
Wow i wouldn’t have thought that 0.05 cents per transaction would be that much less than the 2%?, who came up with this quick math????
5% is relative to the amount being moved while 5 cents was fixed per transaction. At $10 when the 2% comes into effect you get a whopping 20 cents way more than 5 cents
The biggest worry is whether Mthuli will have 100% say in what the money will be used for. So far, on the ground it appears like foreign travel, tear gas, guns, ammo (bullets), water canons, police batons etc will take precedence over health, education, sanitation and water. The problem with this regime has never been tax collection but how the money is abused/misused sometimes before it even reaches the coffers.
the key thing is how the money is used otherwise it won’t make difference i=even if they collected a billion dollars. there’s a 5c tax on fuel mean for repaying some Noczim debt of many years ago; that tax was meant to be retired when collections were sufficient for the target. But the target was long since been met and the debt still stands!
Kudo’s to the government for collecting that much. I’m going on a limb here but maintaining that these are USD collections means the government will be able to pay off some of its debts.
You are so naive, i’m actually worried for you.