Zimbabwe, Finance and Economic Development Minister Increases 2% Tax Transaction

By Abdul Rahman Suagibu –

Photo Credit: Pixabay

NEW AFRICA BUSINESS NEWS, Freetown, Sierra Leone-  ZIMBABWE, Professor Mthuli Ncube, Finance Minister of Zimbabwe laments on 2 % tax transaction. This was a result of concerns raised by business leaders to nullify the tax that they claim is increasing the cost of doing business. Among those disputing the introduction of the tax is Combined Harare Residents’ Association (CHRA).Director Mfundo Mlilo who made a court application in September this year challenging the SI 205-2018.

Professor Mthuli Ncube declares that, the 2 %Intermediated Money Transfer Tax on transactions will continue for much longer as it covers for tax defaulters.

Industrial lobby groups among them – the Confederation of the Zimbabwe Industries and the Zimbabwe National Chamber of Commerce, apparently stevened their concerns on the issue in question. The Minister of Finance has retained that, the tax sought to expand the government’s capacity to finance capital projects and adjusting of different economic sectors.

In an interview with the press, Minister Ncube said, the contested tax will be channeled towards the improvement of Zimbabwe’s productive sectors to perk up economic growth. Part of the tax has also been used to cushion workers through the provision of the highly subsidized Zupco buses.

“We will not scrap the 2 % tax because it helps us on the compliance front, in terms of lowering tax. I cannot pre-announce what I will say in the budget, all I can say generally is we want to support growth and productivity. One of the things we have to look at is obviously incentives and tax adjustments,” Ncube noted.

Popularly known as 2 % tax, the Intermediated Money Transfer Tax came into effect on 13^th October, 2018 after it was gazette in Statutory Instrument 205 of 2018.

High Court Judge – Justice Happias Zhou recently discarded Statutory Instrument (SI) 205 of 2018, which enabled the government to levy 2 % on electronic money transactions above $20. The tax was introduced as an austerity measure by Minister Ncube.

However, Justice Zhou’s judgment had no material effect since there is now a Finance Act, which provides for the contested tax, passed on August 21.

For New Africa Business News Abdul Rahman Suagibu Reports,  Africa Correspondent

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