Finance Minister Mthuli Ncube said that the tax-free threshold of the Intermediated Money Transfer Tax (IMTT) will be raised from the current $10 to $20.
Meanwhile, a tax will be levied on the transfer of money from Mobile Money Transfer Agents to recipients. Ncube claimed that the majority of illegal foreign currency transactions are being conducted through this platform, thereby evading payment of tax and sustaining parallel market activities. He said:
Given the changes in the macroeconomic conditions, I propose to review the tax-free threshold from the current ZWL$10 to ZW$20 and the maximum tax payable per transaction by corporates from the current ZWL$10 000 to ZW$15 000 for transactions with a value exceeding ZWL$750 000.
Furthermore, I propose to exempt additional transactions from IMTT to eliminate double taxation.
The current legislation obliges financial institutions to deduct intermediated money transfer tax on the transfer of money by any means other than by cheque in the following circumstances:
- Between two persons; or
- From one person to two or more persons; or
- From two or more persons to one person.
However, cash-in and cash-out transactions conducted through mobile money transfer platforms do not fall within the above criterion, hence the tax is not deductible.
Consequently, the majority of illegal foreign currency transactions are being conducted through this platform, thereby evading payment of tax and sustaining parallel market activities.
I, therefore, propose to levy a tax on the transfer of money from Mobile Money Transfer Agents to recipients.
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