Zimbabwe govt targets mobile money agents

By Staff reporter | 07 Aug 2019 at 20:24hrs
Mthuli Ncube
GOVERNMENT has widened its two percent tax bracket to include the movements of money between mobile money agents and recipients. In October last year, Treasury reviewed the intermediated money transfer tax from five (5) cents per transaction to two (2) cents per dollar transacted "to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions".

However, cash-in and cash-out transactions conducted through mobile money transfer platforms had been exempted from the tax.
"Consequently, the majority of illegal foreign currency transactions are being conducted through this platform, thereby evading payment of tax and sustaining parallel market activities," Finance minister Mthuli Ncube said in his 2019 Mid-year Budget Review and Supplementary Budget statement last week.

"I, therefore, propose to levy tax on the transfer of money between mobile money transfer agents and recipients. "These measures are effective from August 5, 2019," he said.

The minster also proposed to review the tax-free threshold from the current $10 to $20 and the maximum tax payable per transaction by corporates from the current $10 000 to $15 000 for transactions with value exceeding $750 000.

"These safeguards were put in place, with a view to cushion low-income earners and high volume businesses. The effectiveness of these safeguard measures has, however, been undermined by the inflationary environment," said Ncube.

The minister further proposed to exempt from the two percent tax, transfer of funds for the purchase of tobacco by tobacco buying companies to auction floors and transfer of funds by contracting companies and auction floors to farmers for deliveries of tobacco.

Transfer of funds for the purchase of cotton by financiers to merchants and transfer of funds by merchants to farmers for deliveries of cotton have also been excluded.

Meanwhile, Treasury says it collected $669,85 million from the tax between January and June, surpassing a target of $472,6 million.
In all, the minister said a budget surplus of $803,6 million was realised for the half-year period.

"The surplus clearly reflects entrenchment of fiscal discipline in line ministries and government departments," Ncube said.

However, Zimbabwe's total debt stock is estimated at $66,8 billion as at end June 2019 with external public and publicly guaranteed debt accounting for an estimated $58,1 billion (US$8 billion) of this amount. And of this amount, almost $42,7 billion (US$5,9 billion) is accumulated arrears.



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