'2% tax to stay even after austerity measures'

By Staff reporter | 30 Oct 2019 at 11:47hrs
Mthuli Ncube
FINANCE and Economic Devel- opment minister Mthuli Ncube has said the two percent intermediated money transfer tax on transactions above $10 will continue even after austerity measures come to an end in December.

Ncube told a post-cabinet media briefing in Harare yesterday that despite that the austerity measures were coming to an end, the two percent tax would not be removed as it ensures compliance with tax payments for both the informal and formal sector.

"We are not going to remove the two percent tax. What the two percent does is to ensure tax compliance. It solves for us tax compliance issues and we are going to maintain it even after the austerity measures are gone," Ncube said.

The Finance minister said the two percent tax still had a purpose to serve.

"One of the major reasons we intro- duced the two percent tax was not just to deal with the informality of our economy and compliance of that informal sector, but also the compliance of those who are formal.

"They still owe the government $3 billion and we have been struggling to collect that money. So the two percent tax helps us with compliance with even the formal sector," he added.

Ncube's announcement comes despite increased calls by business leaders to scrap the tax that they claimed was in- creasing the cost of doing business.

Ncube, however, indicated that the government was looking at ways of easing the tax burden on consumers and corporates reeling from high taxation.

"Currently prices are soaring due to various factors, including foreign currency shortages, inflation, high tax rates and other high costs of doing business.

"So we are looking at some areas to cut on, but we haven't reached a conclusion yet as to where we are going to cut but those areas do not include the two percent tax," Ncube said.



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