The government has raised statutory taxes on mobile money and electronic transactions, New Zimbabwe reported. New Finance and Economic Development Minister Mthuli Ncube announced a USD 0.02 tax per US dollar on electronic transactions. He ordered the review of the Intermediated Money Transfer Tax, which used to be charged at USD 0.05 per transaction regardless of volume, effective 1 October.
He said there is a need to expand the tax collection base against the background of rising informalisation of the economy and huge spikes in electronic and mobile phone-based financial transactions and real-time gross settlement transactions (RTGS).
While the new tax seems like a downward review, it is not, as consumers will now be charged per dollar transacted, whereas in the past, the tax was 5 cents for every transaction, including those above USD 1. The new USD 0.02 per dollar tax effectively means most people will have to pay more in tax for every dollar transacted, as more than 96 percent of the transactions currently conducted in the country are electronic.