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:
<blockquote>
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?
</blockquote>
In his response, Ncube said scrapping the IMTT tax will erode the government’s revenue base. He said:
<blockquote>
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.
</blockquote>
Ncube argued that the IMTT tax was helping to tax the informal sector. | <a href="https://www.newsday.co.zw/local-news/article/200005287/2-tax-to-stay-mthuli">NewsDay</a>

Pindula News

Mthuli Ncube Rules Out Scrapping 2% Tax

Zimbabweans have reiterated the need for the removal of the <a href="https://news.pindula.co.zw/2019/11/05/watch-finance-secretary-speaks-on-the-2-transactional-tax/">2% transaction tax</a> saying it is a burden to the already financially hamstrung and over-taxed population, <a href="https://www.newsday.co.zw/local-news/article/200001472/scrap-2-tax-citizens-tell-govt">NewsDay</a> reported.
The 2% intermediated levy on all electronic transactions was introduced in 2018 by Finance and Economic Development minister <a href="https://www.pindula.co.zw/Mthuli_Ncube">Mthuli Ncube</a> as part of austerity measures to kickstart the economy.
<ul>
<li><a href="https://news.pindula.co.zw/2019/10/08/zimra-defends-mthuli-ncubes-effective-2-transactional-tax/">ZIMRA Defends Mthuli Ncube’s “Effective” 2% Transactional Tax</a></li>
<li><a href="https://news.pindula.co.zw/2020/12/05/cross-mthuli-collects-300m-per-day-from-2-cents-tax/">Cross: Mthuli Collects $300m Per Day From 2% Tax</a></li>
</ul>
Citizens who attended the 2023 pre-budget public hearings on Monday in Harare said the government should reduce the tax burden on ordinary people and increase corporate tax.
The hearings are being conducted by the Parliamentary Portfolio Committee on Budget and Finance and the Parliamentary Thematic Committee on Sustainable Development Goals.
Zimbabwe Coalition on Debt and Development (ZIMCODD) representative Darlington Mazonga said: 
<blockquote>
In this country we have so many inequalities, the rich are enjoying on their own. My plea is for government to increase corporate tax, pay as you earn and totally scrap the 2% tax because the tax regime has increased poverty levels in the country.
</blockquote>
He also appealed for a debt audit to be introduced. ZIMCODD has always been critical of the government’s borrowings which it says are not sustainable, and are benefiting political elites.
Zimbabwe Council of Churches (ZCC) local ecumenical fellowship and economic justice champion Gibson Botomani said the government must consider into the mineral resource to remove the tax burden on the citizenry. Added Botomani:
Citizens are heavily taxed and the 2023 national budget must allocate adequate resources to the ministries of Health and Education. Government must be transparent in contract disclosure.
<h2><a href="https://zero.pindula.co.zw/">Pindula News</a></h2>

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