Finance and Economic Development Minister Mthuli Ncube has rejected calls from legislators to either lower or remove the intermediated money transfer tax (IMTT), which is charged at 2% of all financial transactions.

Speaking in the National Assembly, Harare East MP, Tendai Biti (CCC), on Thursday urged Ncube to remove the tax, saying it was burdening the poor. Biti said:

We do not need that IMTT tax. We are one of the few countries in the Sub-Saharan African region that has that tax.

The IMTT punishes the small person who goes into a bank; it does not punish the rich person at the ATM [automated teller machines]. So why are you punishing the poor?

In his response, Ncube said scrapping the IMTT tax will erode the government’s revenue base. He said:

There is also a request that there should be an exemption for local authorities from paying the IMTT tax.

The Portfolio Committee on Local Government recommended that local authorities should be exempted from paying IMTT tax.

The IMTT tax has over the past years generated substantial resources that have enabled the government to support various infrastructure projects, including responding to shocks such as COVID-19 and other climate shocks that the economy has experienced.

The proposal to exempt local authorities will erode our revenue base, but besides, these local authorities at that level are also benefiting from the devolution budget to deal with infrastructure developments at that local level.

Ncube argued that the IMTT tax was helping to tax the informal sector. | NewsDay