It’s not Mukuru with high charges. All Domestic remittances are expensive and it’s by design

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Some quick math on social media suggested that Mukuru and how charges were inconsistent for domestic remittances. In the post, the math went something like this. 

1/ Stolen…. A) Sending US$450 via Mukuru from Harare to Chipinge you are charged US$23. And the maximum you can send is US$450. That means if I were to send US$1500 I need to pay close to US$100 in Mukuru transfer charges.

Alistar Nyamarai Chibanda’s Twitter thread

To cut on costs he used his UK Mukuru account to send money which worked out cheaper than using a domestic account. 8 Pounds or around US$10 vs US$23 for the same amount. So there are a couple of things we need to make clear on. Domestic remittance taxes that are unique to Zimbabwe (4% IMTT), remittance charges of the operator, and the government of Zimbabwe encouraging inflows of forex via remittances.

2/6 B) Sending US$1500 from UK to Zimbabwe (Chipinge) you are charged only £8 ( approx US$10). PLEASE NOTE: it’s same company charging different transfer charges to send money to the same destination, depending on where you send from.

Alistar Nyamarai Chibanda’s Twitter thread

4% IMTT Tax. A Zimbabwean Tax

Mukuru has its operations in a number of regions. It’s an international money transfer business and each region, it operates in has guidelines it’s supposed to comply with. In Zimbabwe, one such guideline is a 4% IMTT tax placed on all domestic foreign currency money transfer services. This means before money transfer agencies take away a single dime, 4% of the amount you are sending goes to the Zimbabwean government. InnBucks charges are 5% with 80% of that going to the government.

This affects all money transfer agents locally. So in his example, US$18 of the US$23 in transfer charges is just the 4% IMTT with Mukuru taking home (roughly 1%) US$5. Which is actually less than the £8 he is being charged when using his UK Mukuru account. Again these percentages vary especially if the sending currency is different from the receiving currency or if the origin of the transaction is a different country from the destination. You can see for yourself in this Mukuru WhatsApp bot.

It must be easy for forex to make its way into Zim

If you think about it it’s playing into the hand of the government. For those with international accounts, their balances are technically money outside of the country regardless of where they physically are. So him sending money from a UK account to a Zim account simply means on the Mukuru system money has left the UK and come to Zim.

The government wants that transaction to be as cheap as possible so that it’s easier to bring that desirable forex into the country. I’m sure the finance minister has a big smile on his face seeing that the resolution she made, in the end, was probably an unforeseen trait of the 4% tax they may have not taken into account. More remittances mean more revenue from the tax and the citizen’s eternal pursuit to preserve value and reduce cash erosion means more inflows of forex through these said remittances. Genius.

As for the US$450 limit. It’s actually an RBZ directive under SI 124 of 2015 which limits daily forex transactions to US$500, monthly limit to US$5 000, and yearly limits to US$20 000. For amounts beyond that, you’ll need to open an FCA account.

Exchange Control (Authorised Dealers with Limited Authority) Order, 2015
(2) Every authorised dealer with limited authority referred in section 3(1)(a) shall observe the following limits for senders—
(a) five hundred United States dollars per day;
(b) five thousand United States dollars per month; and
(c) twenty thousand United States dollars per annum.

SI 124 of 2015

Zim is very expensive for transactions and it’s not the Money Transfer Agent’s fault

Before Money Transfer Agents were a thing, money was moved around the country physically. It would literally be put on the bus. What money transfer agents then came in to solve was the aspect of reliability and security of this movement of funds. But they have to do this in a cost-effective way if they are to be a viable option for potential customers.

That is what they are trying to do. The 4% IMTT affected them big time. It’s for example double the IMTT on ZW$ transactions (2%). So for Money transfer agents to remain a viable option for you and me they have had to take a hit on their cut to the point where most of the money transfer agents including City Hopper, Access Forex, and NBS InstaCash are taking home less than what the government is. Just 3%.

Not only that. There are annual licensing fees they have to also pay to the RBZ on top of this 4% tax and it’s all in forex. Making it a delicate balancing act between providing a convenient service to you and me and keeping the lights on.

(7) Every authorised dealer with limited authority shall pay to the Reserve Bank the following annual licensing fees—
(i) one thousand United States dollars for its head office; and
(ii) four hundred United States dollars for each branch.
(8) Every authorised dealer with limited authority shall pay to the Reserve Bank the following annual licensing renewal fees—
(i) eight hundred United States dollars for its head office; and
(ii) two hundred United States dollars for each branch.

SI 124 of 2015

It seems pretty unfair that the cut the government is taking is higher than the cut the actual service provider is getting. And it’s even more restrictive to the flow of cash in official channels. Almost feels like a get-rich-quick scheme. So yes money transfer services are expensive. More than they should be. But it’s not their fault.

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  1. The Observer

    This is what happens when you are ruled by the Mafia. All they think about is fleecing the innocent citizens of their hard won finances.
    This government is on record limiting the charges, prices and tariffs the private sector charge but it’s doing worse than them . Talk about doublespeak!
    Worse still the diasporans are not allowed to vote yet their money is loved. Nxaa!

    1. Home schooled

      This is a kleptocratic nation.

  2. Robbed by Western Union

    If sending money from outside Zimbabwe to Zimbabwe you are advised to shop around for the remittance service provider with the most favorable USD exchange rate.

    I found out I could have saved $20 if I had used WorldRemit instead of using Western Union that is bundled in bank’s services. That Western Union exchange rate was daylight robbery.

    1. M2

      From where I send, WorldRemit has the most extortionate exchange rates. The apparent charge can be as high as 17% when exchange rate loss is factored in. WesternUnion is in the middle with about 8% apparent charge and the best for me has been MoneyGram at about 3.5% but MoneyGram is in the habit of always requiring a long telephone interview before approving even the smallest of online remittance transactions. If you are in Zim with your international debit card you also have the option to use it directly at point of sale at 0% charge (a number of shops offer the same USD cash discount whether you have actual USD cash or international card). You can also withdraw cash from some bank’s ATMs – convenient but slightly expensive at about 3.5% (Stanchart and Stanbic). How I wish Revolut would onboard people from African countries. They are the best fintech in the whole world but they are limited to European countries, the US & Canada and a few other developed countries. P2P transfers are 100% free even across borders. Their debit card works internationally and transactions are free of charge and incur 0% exchange rate commissions (except on weekends where they take a negligible commission). I don’t know how they do it and still make money but their digital banking service is super.

  3. Chipo Moyo

    But there’s a new alternative yeUhuru, been using it and their charges and services are quite reasonable. I can redeem my funds from my wallet as need arises too.

  4. Malu Dread

    “The government wants that transaction to be as cheap as possible so that it’s easier to bring that desirable forex into the country.”
    You make it seem like Mthuli has some control over charges in other countries. It’s just a tax(or money making scheme) like it’s brother the 2% on local currency transfers.

  5. Rumbidzai

    But there’s a new alternative yeUhuru, been using it and their charges and services are quite reasonable. I can redeem my funds from my wallet as need arises too.

  6. Killian chipandi

    I have a problem with Mukuru I sent my cousin 100 000 in his account its over a month they say they need proof of income I gave them and they keep on asking my cousin many questions they don’t want to release the money that is know criminality upon there customers they have many clients that why they are doing but one day you will see yourself in the media because of that you are now robbing people



    2. Wait – Are you trying to lie to us

      I asked Google “mukuru maximum limits for money sent” and got the answer;

      USD 500 (five hundred United States Dollars) per day; USD 2,000 (two thousand United States Dollars) per month; and. USD 20,000 (twenty thousand United States Dollars) per year.

      1. Why do so many people lie!

        He probably lying.

      2. Enrico

        Am sure it was 100 000 bond notes. Kikiki

    3. Wisey

      I assume ts R100k

  7. The Empress

    This is why people must read up and have at least a rudimentary understanding of the the general laws governing money laundering and the like. These are the type of transactions that raise eyebrows. And the whole reason people the world over now have to fill out those KYC forms.
    It would have been more surprising if they had just facilited this transaction. Cos if turns that they helped facilitate illegal activities they will be in a lot of trouble.
    They’re just following the anti laundering laws, rules and regulations that now currently prevail worldwide.
    Unlike what you see on TV in the real world, sending or receiving such large amounts of money like that, especially through an account that has a history of sending/receiving less than $100 – $1000 a month raises so many Red Flags it’s not even funny. Questions will be asked.
    – How did you get the money?
    – What do you want to use it for?
    – Dont you have a bank account
    – Doesn’t the receiver have a bank account
    – Why didn’t you use the large banking system (x15 times in different ways)
    And if the answers are not satisfactory that money will stay in Limbo.

  8. Home schooled

    This is a kleptocratic nation.

  9. Anonymous

    Ndaimboshandisa ma betting sites like Moors and Africabet to transfer cash and it was free of charge using that trick but I don’t know nowadays.

  10. MJ

    We should normalize using Crypto, current problem is that the Crypto sellers are charging ≈10%, if we can get that to be less than 4% it wld make sense

  11. Counter-productive taxes

    These government taxes on electronic transactions only serve to discourage people from using electronic forms of payment and transfer of funds.

    No wonder most people are using cash for buying stuff and probably sending funds for relatives etc

  12. fak z a nu pf

    f u ck z a nu p f

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