Said Hon, Prof Mthuli Ncube in a statement, "At the occasion of the presentation of the 2018 Mid-Term Monetary Policy, I announced a review of the Intermediated Money Transfer Tax from the current 5 cents per transaction to 2 cents per every dollar transacted.
Further details pertaining to the tax are as follows:
The 2 Cents per Dollar tax, will apply on transactions of $10 and above only. Transactions below $10 will be exempt from this tax. There is a cap of $10 000 on the amount of tax to be paid. This implies that transfers above $500,000 will attract a flat tax of $10,000.
In addition, the following transactions will be exempt from the proposed tax:-
• Intra-company transfer of Funds including transfer from intermediary accounts;
• Transfer of funds on purchase and sale of equities;
• Transfer of funds on purchase and redemption of money market instruments;
• Transfer of funds for payment of salaries;
• Transfer of funds for payment of taxes;
• Transfer of funds to intermediary accounts, for example, conveyancers;
• Transfer of funds in respect of foreign currency related payments; and
• Transfer of funds by Government.
This tax review comes into effect on the date of gazette of the relevant Regulations.
Meanwhile, Ncube has said that the tax was necessary although there will be exemptions and a cap on high value transactions.
Speaking at the launch of the Transitional Stabilisation Plan this morning, Ncube said Treasury would cap the payment of the tax at the higher end while there will be exemptions on certain sectors but overall, the tax was necessary as it enables Government to plug the gap on its widening budget deficit, which perpetuated uncontrolled domestic borrowing.
Press statement on the Money Transfer Tax. pic.twitter.com/am2yHTvoPZ
— Prof. Mthuli Ncube (@MthuliNcube) October 5, 2018
