ZIMRA Defends Mthuli Ncube’s “Effective” 2% Transactional Tax

Zimbabwe Revenue Authority (Zimra) has said that the government’s 2% transactional tax introduced last year can be a foundation for an effective tax regime in the country.

Zimra said that the tax was introduced well in time as the majority of the people were either evading or avoiding taxes.

Addressing Parliament’s Budget and Finance Portfolio Committee on Monday, Zimra Commissioner-General Faith Mazani said:

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The 2% tax was received negatively by the public but from our tax structure and statistics, compliance has been very low.

Very few people are paying taxes especially the registered ones. This has caused a huge fiscal deficit on the government part. We are hoping that if we can improve on our compliance, this will ease our tax structure but the government needs advice on this.

Her submissions, however, did not convince representatives of different sectors of the economy with Confederation of Zimbabwe Industries president, Henry Ruzvidzo arguing that the tax amounted to double taxing as those who pay the Pay As You Earn (PAYE) and other taxes also pay the 2% tax.

Zimbabwe National Chamber of Commerce chief executive officer, Chris Mugaga called for the removal of the 2% tax saying that it was increasing the cost of doing business.

More: New Zimbabwe

 

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