Zim President: No Retreat on 2 Cents Money Transfer Tax

Harare - Zimbabwean President Emmerson Mnangagwa yesterday said the Intermediary Money Transfer Tax of 2 cents will remain in force as it is critical in transforming the economy, which has suffered from two decades of stagnation. 

The President said the tax was not designed to hurt ordinary people and companies, but to help the manufacturing sector get funds for retooling and modernisation as the economy gears to ramp up production.

However, there is room for the tax to be refined going forward if suggestions are proffered, to create a win-win situation for individuals and companies on one hand, and the economy on the other.

President Mnangagwa said this while fielding questions from delegates during the Professional Women, Women Executives and Business Women’s Forum (Proweb) breakfast meeting in Harare yesterday.

British American Tobacco (BAT) Zimbabwe managing director Clara Mlambo had indicated that the tax was choking companies and affecting consumers’ disposable incomes.
President ED Mnangagwa

“I am sure you have not studied who are exempt from that tax. If you had taken care to study the exemptions of the 2 percent (tax), some of the issues you have raised, you would not have raised because they are already exempt.

“The transfers between companies, company-to-company, salaries, employment transactions and so on . . . there is a list of such exemptions that are there,” responded President Mnangagwa.

Last Friday, Finance Minister Professor Mthuli Ncube announced upper and lower limits for the Intermediary Money Transfer Tax.

Prof Ncube said transactions below $10 will no longer attract the 2 cents tax, while all transactions between $10 and $500 000 will comply with the new tax regime.

Further, the new tax, which will be gazetted “soon”, will not apply to eight other types of transactions which are; inter-company transfer of funds, including transfers of intermediary accounts; transfer of funds on sale and purchase of equities; transfer of funds on purchase and redemption of money market instruments; transfer of funds for payment of salaries; and for payment of taxes.

The tax will also not apply to transfer of funds to intermediary accounts, transfer of funds in respect of foreign currency-related payments and transfer of funds by Government. 

The country’s internal debt is $9,5 billion as at August this year, up from $275,8 million in 2012 while the external debt is $7,4 billion. The total debt is $16,9 billion.

President Mnangagwa said citizens, industrialists and Government may differ on how to achieve the desired results, but action has to be taken.

“Yes we may differ on how the journey must be walked but we must begin walking, as we walk the journey, the genuine and patriotic Zimbabweans will come and say we should do it this way, why don’t we do it this way, and we are listening leadership.

“We will always take on board those contributions that we think are constructive and progressive for purposes of again, having a solid economy of our country. - The Herald 

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