Zimbabwe to raise USD $3.4bn from 2 cents tax

2018-10-11 10:35:17

The Zimbabwean government has the potential to raise about USD $3.4 billion annually through the newly introduced Intermediary Money Transfer Tax of two cents, an expert says.

Finance and Economic Development Minister Professor Ncube recently announced upper and lower limits for the Intermediary Money Transfer Tax, as part of the broader fiscal stabilization measures.

The proposed tax is aimed at widening room for capital funding and retooling of the manufacturing sector.

Under the new framework, transactions below USD $10 will no longer attract the two cents tax, while all transactions above USD $10 to $500,000 will comply with the new tax regime.

The Intermediary Money Transfer Tax is a quick fix to the economy, Bulawayo-based tax expert Peter Mgodi said.

“The assumption is that others will be transferring $20 others will be transferring thousands of dollars while others will be transferring millions. And when we average the transactions and come to $100, it means we will make $2 per transactions and not five cents and therefore the minister's projection will be $3.4 billion,” he said

Mgodi said in 2017 that the Zimbabwe Revenue Authority (Zimra) total revenue collections were within the USD $3.4 billion range.