Minister of Finance and Economic Development, Mthuli Ncube has said that his new 2 percent tax on money transfers is progressive because it has capped the burden for both the wealthy and the poor. According to Ncube, the poor are protected because they do not have to pay tax for any amount below $10 while the wealthy are protected because they can only pay a maximum tax of $10 000. In an interview with NewsDay, Ncube says
I think it’s fair. What we have done is we have capped the burden for the wealthy and companies and also capped the burden for the poor also, so we have impacted both ends of the spectrum and that way is progressive… I will be very precise, what it does in terms of transactions, those who are spending $10 and below are not going to pay the tax, so that is the bottom of the pyramid, that is poor. They are exempt from the tax…There is a cap on how much anyone can pay in terms of transaction tax, which is $10 000. So this is really impacting on corporates, private companies because they were being impacted as well…We are the tax collector, so the combination of exemptions of the flow in terms of the $10, in terms of the cap on the amount of $10 000, we believe that we have managed to accommodate everyone who matters and the tax, therefore, is more progressive than regressive.
Introducing the Pindula News Mobil App
Download from Google Play Store
Professor Mthuli Ncube is the Minister of Finance and Economic Development. He was the Chief Economist and Vice President of the African Development Bank, financial, economics, investment, and public policy expert, entrepreneur and academic. Professor Ncube divides his time between the private sector in Switzerland... Read More About Mthuli Ncube