Zimbabwe’s tax agency, the Zimbabwe Revenue Authority
(Zimra) said revenues from the controversial 2% electronic money transfer tax
rose by a staggering near 6 000% to $242 million by March compared to $5
million recorded during the same period last year.
Finance minister Mthuli Ncube sparked an outcry in October
last year when he introduced the intermediate money transfer tax (IMTT) to
increase electronic tax charges from the initial 0,05 cents to 5% for all
transactions.
Ncube was forced to review the tax to 2% after prices and
services skyrocketed after its introduction. Ncube also announced some
exemptions and types of transactions to which the tax would not apply following
the outcry.
Zimra board chairperson Callisto Jokonya said the
electronic money transfer tax has contributed nearly 15% of its $2,059 billion
gross revenue since its introduction in October.
“Intermediate Money Transfer Tax collections amounted to
$242,84 million against a target of $150 million. This translates to a positive
variance of 88,56%.
The revenue head grew by 5 333,99% when compared to $5,21
million collected in the first quarter of 2018 before policy change.
“The revenue head contributed 14,55% of total collections
during the quarter,” Jokonya said in a statement accompanying Zimra’s revenue
performance report for the quarter ended March 31.
The electronic transfer tax seen as a desperate move to
widen revenue streams in the face of lack of budgetary support from
international lenders was challenged at the High Court by opposition legislator
Tendai Biti and pro-democracy activist Mfundo Mlilo.
President Emmerson Mnangagwa defended the tax as necessary,
arguing that it was not designed to hurt ordinary people and companies, but to
help the manufacturing sector get funds for retooling and modernisation.
The tax was gazetted in Statutory Instrument 205 of 2018
and introduced by way of amendments to section 22G of the Finance Act (Chapter
23:04) and the
Thirteenth Schedule of the Income Tax Act (Chapter 23:06).
Biti and Mlilo, however, argued that Ncube’s statutory
instrument still remained unconstitutional and a nullity because a minister
cannot, through regulations, amend an Act of Parliament.
Jokonya said Zimra had also recorded revenues of $565,65
million from excise duty collections as a result of an increase in the demand
of fuel as shortages
persist.
“Excise duty collections increased by 142,44% from $233,32
million realised in the first quarter of 2018. The performance of the revenue head
is attributed to
an increase in the duty rate and demand and supply of
diesel and petrol,” Jokonya said.
“During the quarter under review, diesel imports increased
by 9,10% from 208,86 million litres supplied in the first quarter of 2018 to
227,86 million litres.
Similarly, petrol imports increased by 11,19% from 123,67
million litres in the first quarter of 2018 to 137,51 million litres.” Newsday
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