UPDATED: Govt Increases Tax On Money Transfers With Immediate Effect

Finance Minister Mthuli Ncube announced that Government has with immediate effect reviewed the amount charged for every money transfer transaction from 5 cents per transaction to 2 cents for every dollar per transaction to widen tax base.

Ncube said the increase was due to an increase in informalisation of the economy and huge increase in electronic and mobile phone based financial transactions and RTGS transactions. he also said so far in 2018 1.7 billion transactions went through as compared to 50 million four years ago. Said Ncube:

Treasury introduced the Intermediated Money Transfer Tax with effect from 1 January 2003 through the Finance Act 15 of 2002. The tax was set at 5 cents per transaction, which was a specific tax. However due to the increase in informalisation of the economy and huge increase in electronic and mobile phone based financial transactions and RTGS transactions there is need to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions and RTGS system. The information we have so far is that in 2018 1.7 billion transactions went through as compared to 50 million four years ago.  I hereby review the Intermediated Money Transfer Tax from 5 cents per transaction to 2 cents per dollar transacted, effective 1 October 2018.  I am therefore directing financial institutions, banks and ZIMRA, working together with telecommunication companies to extend the collection to all electronic financial transactions.

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