This was revealed by the Minister of Finance and Economic
Development, Professor Mthuli Ncube during a wide-ranging interview with Sunday
News in Bulawayo yesterday.
Prof Ncube said the expected rise in remittances was due to
increased diaspora support to locals, adding that his Ministry was looking at
availing US$ Diaspora Bonds to enable Zimbabweans living abroad to invest their
funds at fair interest rates.
“There has been steady increase in international
remittances and we expect them to get to between US$1.5 and US$1,6 billion at
year end up from US$1,4 billion last year. As results of these remittances my
Ministry is considering availing US$ Diaspora Bonds to allow Zimbabweans living
outside the country to invest their funds at fair interest rates. This will
enable them to remit to family to Zimbabwe their interest while leaving their
initial capital investment intact,” said Prof Ncube.
Locally, Prof Ncube said there has been a significant rise
in domestic remittances but the increase is not being reflected in Treasury
inflows because they are not giving Government its Intermediated Money Transfer
Tax (IMMT) on time.
“These delays then force Government to borrow through
instruments such as Treasury bills so that we can fund development projects
currently underway. The delay in remitting taxes to Treasury by money transfer
companies forces Government to borrow through such instruments as Treasury
bills to fund development projects,” he said.
Prof Ncube said there has been substantial growth with the
sector with many companies being licensed to operate which he attributed to an
upturn in economic fortunes in the country. He expressed hope that this growth
will translate into lower costs of moving money with current fees standing four
percent for domestic transfers.
“I think current money transfer rates are too high and
should decrease but this will be determined by competition within the industry
which is growing at a phenomenal rate. Through the Reserve Bank of Zimbabwe
(RBZ), we have been licensing more and more companies so in the medium to long
term, the cost of moving money should decrease.”
A recent study showed that there has been a 30 percent
increase in domestic transfers. However, that increase is not being reflected
in Treasury inflows because they are not giving Government its Intermediated
Money Transfer Tax (IMMT) on time.
“But the problem with remittances due to Treasury is not
unique to money transfer companies alone. Even banks are guilty of this.
Treasury through the Zimbabwe Revenue Authority (Zimra) is currently owed about
US$6 million by banks in Value Added Tax remittances that they should pay to
Zimra,” revealed Prof Ncube.
“My Ministry will soon begin to penalise them if they hold
onto funds due to Treasury for longer than necessary. Proposed penalties will
be twice what they should remit to Treasury if they delay,” revealed Prof
Ncube.
He said delays were sometimes well over 90-days which puts
a strain on Treasury funds and its financial commitments to Government
business. Sunday News
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