Business

Outcry as Zim imposes another tax deduction on US$ transactions

By Staff Writer

FINANCE Minister, Prof Mthuli Ncube has attracted an outcry following this week’s decision to subject US$ transactions to the 2%IMTT on the back of yet another overhaul of the tax measures targeted at all foreign currency denominated transactions.
The Treasury boss 2024 National Budget blueprint introduced a raft of tax measures which prompted an outcry form citizens who are naturally the last in the line of price takers following the significant increases in the prices of basic commodities

The business community maintains that the current price thresholds are not reflective of the true impact of the tax measures introduced last year arguing they have had to eat into their profit margins to satisfy the taxman.

But as if not enough, Ncube cracked the whip again this week, announcing new tax measures under Statutory Instrument 80 0f 2024 which will see the new measures coming into effect.

“For each withdrawal above the local currency equivalent of USD$100, a local currency equivalent of US$ 0,05. The taxes shall be calculated at the rate of 0,02% on every Zimbabwe Gold (ZiG) or part thereof transacted for each transaction on which tax is payable,” the policy directive reads in part.

Prior to the latest policy amendment the 2% tax was only charged on ZiG currency while the US$ transactions tax measures were pegged at 1%.The business community was in fact pleading for the total scrapping of the IMTT due to the heavy deductions they were facing.

The policy directive stipulates that provided that if a single transaction on which the tax is payable is equivalent in Zimbabwe Gold (ZiG) of ten thousand one hundred and fifty United States dollars at the prevailing interbank rate shall be chargeable on such transaction; or section 36G (2) of the Taxes Act shall be calculated at the rate of 0, 02% on every US$ or part thereof for each transaction on which tax is payable.

“If a single transaction on which the tax payable is equivalent to or exceeds US$500 000, a flat intermediated money transfer tax of US$10 150 shall be chargeable on such transaction. The Taxes shall be calculated at the rate of 0,02 US$ on every dollar of outbound foreign payment or part thereof for each transaction on which tax is payable.

“The taxes shall be calculated at the rate of 0,02 US$ on every Zimbabwe gold backed digital token or part thereof transacted for each transaction on which tax is payable,” the SI added.

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