The Minister of Finance and Economic Development Professor Mthuli Ncube yesterday revealed further details pertaining the reviewed Intermediated Money Transfer Tax.
Ncube announced a review of the Intermediated Money Transfer Tax from the 5 cents per transactions to 2 cents per every transacted dollar at the presentation of the 2018 Mid-Term Monetary Policy on Monday.
“The 2 cents per dollar tax, will apply on transactions of $10 and above,” Ncube said. “Transactions below $10 will exempt from this tax.”
“There is a cap of $10 000 on the amount of tax to be paid. This implies that above $500 000 will attract a flat tax of $10 000.”
The Minister went on to reveal other transactions to be exempt from the proposed tax which includes the intra-company transfer of funds including transfer from intermediary accounts and the transfer of funds on the purchase and sale of equities.
Ncube exempted from tax the transfer of funds on purchase and redemption of money market instruments.
Other transactions to be exempted include the transfer for payment of salaries and transfer for payment of taxes.
Ncube also exempts from tax the transfer of funds to intermediary accounts like conveyancers, transfer of funds in respect of foreign currency related payments and transfer of funds by the government.
A development Coalition had already reacted to the proposed Intermediated Money Transfer Tax by saying the measure will hurt the poor most as the rich have an option to avoid the 2 cents per dollar tax by transferring the costs to the final consumer.
“It would only make economic sense for the government to further incentivize people for the use of
electronic transactions,” a development coalition ZIMCODD says.