The Confederation of Zimbabwe Industries (CZI) has called on the government to put a cap on the new money transfer taxes because they are not sustainable. Minister of Finance and Economic Development Mthuli Ncube’s announcement 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 to widen the tax base. However, Industry said the new tax regime would increase the cost of doing business which would hurt the economy. Confederation of Zimbabwe Industries (CZI) president, Sifelani Jabangwe told state media,
It will result in the increase in the cost of doing business if left in the current form. It’s good that it will help widen the tax base including the informal sector but the challenge is that if it left open-ended it has adverse effects on the economy… Our recommendation is that it be made two percent with a cap, say with a maximum of $2 because what will happen for big businesses is that whenever we pay salaries we pay two percent more, whenever we pay for anything we pay two percent more. It will increase the cost to the value of that payment, It will be unsustainable…So, by capping it at $2 it will ensure the objective of tax collection but not at the expense of business.
More: Herald
As you say Professor its most welcome to reduce the fiscal deficit as well as capturing the informal sector which is not paying tax, but also note that the tax bracket adjustment will also affect loyal tax payers. You need to differentiate the tax brackets according to formal or non formal.
Moron the informal sector has always paid taxes via VAT!!! Normal businesses can avoid these taxes because they are registered. VAT is specifically designed for normal customers and informal businesses. We have been paying 15% on most goods for years. Amateur fool