Zimbabwe: Press Statement by the Minister of Finance and Economic Development Hon. Prof. Mthuli Ncube on the Intermediate Money Transfer Tax (05.10.2018)

Zimbabwe: Justice at last as Zim Court Orders ZRP to pay $11,350 to Good Chinyerere, a victim of Police Brutality (03.10.2018)

Zimbabwe: The new 2% Mobile Money Tax on each transaction, effective yesterday!

The Reserve Bank of Zimbabwe (RBZ) Governor John Panonetsa Mangudya dropped a Monetary Policy Statement on the 1st October 2018. This one is really telling the state of the economy, as they are planning to find ways to cover their deficits and also fueling the financial state will all means. They are pawning the state and hoping to finds ways to cover the expenses.

Especially, will the Zimbabwe African National Union – Patriotic Front (ZANU-PF) who will address and put this into effect.

The major task is the electronic and digital payments or transactions, which the Monetary Policy is addressing too, just like other countries recently. Therefore, the public will cost for the expenses that the ruling party has taken for granted.

This amount of money, they want to tax:

A total of 3.2 million transactions valued at US$37.6 billion were processed through the RTGS system during the six months ended June 2017. This represented 25% and 31% increases respectively. The mobile payment channel was second highest with 13% and 14% increases in volumes and values aggregating to 15 million and USD5 billion correspondingly” (RBZ – Monetary Policy Statement, 01.10.2018).

As the RBZ told the estimated usage, the Minister of Finance and Economic Development, Prof Mthuli Ncube, dropped his statement on how to tax that money:

Treasury introduced the Intermediated Money Transfer Tax with effect from 1 January 2003 through the Finance Act 15 of 2002. The tax was set at 5 cents per transaction, which was a specific tax. However due to the increase in informalisation of the economy and huge increase in electronic and mobile phone based financial transactions and RTGS transactions there is need to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions and RTGS system. The information we have so far is that in 2018 1.7 billion transactions went through as compared to 50 million four years ago. I hereby review the Intermediated Money Transfer Tax from 5 cents per transaction to 2 cents per dollar transacted, effective 1 October 2018” (Prof Mthuli Ncube, 01.10.2018).

With the knowledge of the usage of Mobile Money, this will clearly hit the citizens with the least. Also, all informal usage of the mobile money use. This is clearly, a way of bleeding the financial market as every transaction will be more costly. By doing so, the state is also taking out valuable funds, as these are taken out and not able to be spent on needed goods and services.

This here will impact the transactions and also most likely, ensure that less people are using them. As the cost of Mobile Money are too high. They are really pushing the envelope and adding more cost to ordinary life. As the simple thing of moving money from A to B becomes costly and the adding expenses are all because of the state. This because the government are making sure people are paying more every single time. They are directly paying two percentage tax on the Mobile Money transaction. That is effective from yesterday. This is what the government are doing its citizens, where the government have to do crowd-funding to fix the cholera problem. That is the government that are doing this too. Peace.