MDC MP Calls For 5 Percent Tax On Electronic Money Transfers

Eddie Cross the MDC member of parliament for Bulawayo South has called for a 5 percent tax on all electronic transfers in order to raise more revenue for the government. Cross’ proposal is unlikely to be welcomed by the people of Zimbabwe, as they have now resorted to using electronic money due to the cash shortages which have been bedevilling the country for the past 18 months. The Reserve Bank of Zimbabwe (RBZ) has advocated for the use of electronic money to combat the cash shortages. Even worse, mobile money is already taxed at 5 percent, so Cross’ proposal would result in a possible tax of 10 percent on mobile money.

Contributing to debate on the finance bill, Cross said:

Mr Speaker, several months ago when you raised the idea that we could have a $10 billion budget, I was very sceptical, but the reality is; if our real GDP is $40 billion, then 25% of our GDP is $10 billion. Mr Speaker Sir, I believe that we can cover the shortfall in our revenues. We can provide more money for our health sector; we can fund the Parliament of Zimbabwe properly if we put a small tax on electronic transfers. If we put 5%, five cents in a dollar on that, it is $9 billion of new revenue.

Mr Speaker, I have spoken to our Committee and it is sceptical and has urged me to make sure that this matter is raised in the Committee in the next month or so. However, I think this is an urgent matter because we must resolve this question of our deficit and the only way to resolve it is to tax the people in the informal sector. If you put a tax on electronic transfers, it is easy and cheap to collect and everybody pays. If you step into an emergency transport taxi and you pay your fare using EcoCash, you pay five cents to the Minister of Finance, it would solve our problems overnight. It will reduce expenditure on labour and salaries to 35% of our budget; it would eliminate our deficit immediately and give us resources to settle our bill with the multinational agencies. I think that we have to look at this.