ZIMBABWE: 2% transactional tax stays
GOVERNMENT will continue collecting the 2% transactional tax which it introduced in October last year despite a continued howls of disapproval from the public.
Unveiling the 2020 National Budget in the National Assembly, Thursday, Finance minister, Mthuli Ncube said while the intermediated electronic money transfer tax will stay adding the minimum thresh-hold had been increased from $20 to $100.
According to Ncube the budget is anchored on higher productivity, growth and job creation.
“I propose to review the tax-free threshold from the current $20 to $100 and the maximum tax payable per transaction by corporates from the current $15 000 to $25 000 for transactions with values exceeding $1 250 000. 66 bulk payments through mobile banking platforms 244.
“For the avoidance of doubt, all bulk payments through mobile money banking platforms attract intermediated money transfer tax, except where such payments relate to remuneration 245,” Ncube said.
“I, therefore, propose to exempt from Intermediated Money Transfer Tax (IMTT), social transfers by development partners accredited in terms of the Privileges and Immunities Act [Cap 3:03].”
Since the tax introduction through Statutory Instrument 205 of 2018, Zimbabwe Revenue Authority has been able to meet its targets with authorities indicating the country’s informal sector has now been “formalised” at least within the tax system.
In previous years only five cents was charged on electronic money transfers.
High Court Judge, Happius Zhou later on set aside the statutory instrument after a local activist, Mfundo Mlilo had approached the court challenging that the introduction was unprocedural. However Ncube had already incorporated the tax into the Finance Act rendering the judgement academic.