Increase In Tax For Money Transfers Will Destroy Industry’s Margins: United Refineries CEO

Chief Executive Officer at United Refineries Limited Busisa Moyo has expressed concern at the increase in taxes for money transfers saying that this will cut into the profit margins of businesses and industry.  Moyo said that some business can potentially lose up to 33 percent of their profits to the new tax.  Presenting new fiscal measures after the mid-term monetary policy statement on Monday, Finance Minister Mthuli Ncube announced that the government had reviewed the amount charged for every money transfer transaction from 5 cents per transaction to 2 cents for every dollar per transaction (2 percent of very transaction) to widen the tax base. Moyo said that he hoped that the monetary authorities will look into this as it was destructive for the industry.

Writing on Twitter Moyo said,

While the 2c per dollar (2%) per transaction is good for lower income levels. It will destroy our margins. In the food sector, we work on 6% margins. This is a 33% reduction in profits Please re-check!

…I think it’s a typo because it amounts to over $250m based on June transactions. Someone said RBZ is trying to discourage use of RTGS for parallel activities. I am struggling to see how though.

…A retailer with who makes a turnover of $1m and makes 5% ($50,000) margin now has 3% ($30,000) & $20,000 now goes to the bank…If we didn’t care about our country we would keep quiet & let things crumble! This could drive people not use the bank system. I think it was a finger problem. 0.2% no problem but 2% is creatively destructive…Anyway, we have an RBZ that is like receptive. They have taken note.

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