THE transfer of funds from mobile money transfer agents to
recipients will now be subjected to taxation as Treasury moves to plug out
rampant illegal foreign currency deals being conducted via the cash-in and
cash-out facility.
Although Government has established the interbank foreign
currency market to stabilise the financial services sector, illegal foreign
currency deals remain stubborn with the parallel market still exerting pressure
on the formal trading platform.
In his 2019 mid-year budget review statement presented in
Parliament on Thursday, Finance and Economic Development Minister Professor Mthuli
Ncube tracked the remnant illegal forex deals to the abuse of the cash-in and
cash-out facility.
He said while legislation obliges financial institutions to
deduct intermediated money transfer tax on the transfer of money by any means
other than by cheque, mobile money transfers by agents to recipients were left
out of the tax bracket. The existing regulations apply to taxation on money
transfers between two persons, from one person to two or more persons or from
two or more persons to one person.
“However, cash-in and cash-out transactions conducted
through mobile money transfer platforms do not fall within the above criterion
hence the tax is not deductible,” said Prof Ncube.
He said most illegal foreign currency transactions were
being conducted through this platform thereby evading payment of tax and
sustaining parallel market activities.
“I, therefore, propose to levy tax on the transfer of money
from mobile money transfer agents to recipients,” said Minister Ncube.
Government introduced the intermediated money transfer tax
(IMTT), popularly known as the ‘2c tax’ in October last year. The tax is pegged
at 2c per every dollar transacted as part of measures to widen the revenue
base. It replaced the previous tax of five cents per transaction.
Prof Ncube said the bulk of the revenue from this tax head
was being used to finance critical infrastructure projects such as roads. Since
its introduction, the tax head has performed very well and has become one of
the top revenue head contributors, according to Zimra.
In his budget review statement, Prof Ncube announced a
further review to the IMTT citing changes in the macro-economic conditions.
“I propose to review the tax-free threshold from the
current ZWL$10 to ZW$20 and the maximum tax payable per transaction by
corporates from the current ZWL$10 000 to ZW$15 000 for transactions with value
exceeding ZWL$750 000. Furthermore, I propose to exempt additional transactions
from IMTT in order to eliminate double taxation,” he said.
Individual tax payers and corporates have complained that
the 2c tax has increased the cost of doing business and is draining consumers.
Prof Ncube has said the revenue enhancing measures are
meant to boost domestic resources to support the Transitional Stabilisation
Programme (TSP), a major building block towards attainment of an upper middle
income economy by 2030.
“It is therefore time to really focus on production,
productivity, growth, poverty reduction and development, given that the fiscal
and monetary policy issues are under control,” said Prof Ncube. Herald
0 comments:
Post a Comment