Desperate Zim Govt Acted Without Thinking On 2 Percent Tax: Prof Steve Hanke

Renowned economist and currency expert, Professor Steve Hanke of Johns Hopkins University in Baltimore in the United States has criticised the government’ decision to introduce a 2 percent tax on all money transfers. Hanke who is a professor of Applied Economics and co-director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at the university, said that Finance Minister Mthuli Ncube’s decision to introduce the tax shows that the government is desperate and did not think things through as the policy will harm business. Writing on Twitter, Hanke said

Zimbabwe’s new 2% tax on all money transfers reveals more than the tax. It’s a sign of a desperate government acting without thinking. This tax will only cause more private sector panic and further loss of confidence. The last thing Zim needs is more government involvement in the economy.

Zimbabwe's new 2% tax on all money transfers reveals more than the tax. It's a sign of a desperate government acting without thinking. This tax will only cause more private sector panic & further loss of confidence. The last thing Zim needs is more gov involvement in the economy

— Prof. Steve Hanke (@steve_hanke) October 9, 2018

Hanke also accused the country’s monetary authorities of data manipulation after Ncube rebased the country’s economy and grew it by 40 per cent saying that it was much bigger than people thought. Said Hanke,

Now official data show Zimbabwe economy to be 40% larger than it was. For a government that claims Zimbabwe inflation is 4.83%/ year, when I measure it at 58.7% so far this year, the rebasing exercise is yet another example of a government playing fast and loose with data.

Now official data show Zimbabwe econ to be 40% larger than it was. For a govt. that claims Zim’s inflation is 4.83%/ yr, when I measure it at 58.7% so far this yr., the rebasing exercise is yet another example of a govt. playing fast & loose with data https://t.co/RMN1mCrvpC

— Prof. Steve Hanke (@steve_hanke) October 8, 2018