The Bankers Association of Zimbabwe (BAZ) has defended current bank charges, saying the fees were being increased by the Treasury’s Intermediated Money Transfer Tax (IMTT).
Local banks have been accused of fleecing depositors through astronomical bank fees coupled with meagre interest rates on deposits.
Even though almost every other industry in Zimbabwe is struggling due to a weak economy, banks have been thriving as a result of the new focus on non-funded income rather than the core business of lending more.
Banks have hiked withdrawal fees to about 3% of the amount being withdrawn from the 1% charged a few months ago.
Depositors are also being charged about 2.5% for withdrawals done on Automated Teller Machines.
The permanent secretary of the Ministry of Finance, Economic Development and Investment Promotion, George Guvamatanga, said that banks should slash their charges and desist from “robbing” depositors.
However, Fanuel Mutogo, the CEO of the Bankers Association of Zimbabwe, told <a href="https://businesstimes.co.zw/banks-fleece-depositors/">Business Times</a> that bank charges reflect IMTT. He said:
<blockquote>
We have competitive charges but the problem is that with this IMTT from the Treasury, the charges going higher and the blame is on banks. We are not responsible for IMTT.
</blockquote>
According to ZIMRA, IMTT is tax-chargeable on financial transactions which happen through transfers such as direct debits, online transfers, mobile money transfers, supplier payments and interbank transfers subject to specified exemptions.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

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Banks Blame Money Transfer Tax For "Exorbitant" Fees

EcoCash has reduced its US dollar transfer charges following the government’s reduction of the Intermediated Money Transfer Tax (IMTT) to 2%, down from 4% effective from 1 January 2023.
In a notice to its customers, EcoCash said the 2% tax only applies to transactions higher than US$5. It also said all cash-in transactions were free.
EcoCash US dollar transfers are done via the EcoCash US dollar wallet, accessible by dialling *153# on an EcoCash registered Econet line.
The EcoCash wallet allows users to cash in, cash out, send money, receive money, make payments and buy airtime in US dollars. A company spokesperson said:
<blockquote>
The beauty about the EcoCash USD wallet is that there is no need to register a new wallet, as all existing registered EcoCash customers have the USD wallet by default on their profile, which is accessible by simply dialling *153#.
</blockquote>
Cash-in can be done at Econet Shops, OK Supermarkets, and Steward Bank branches throughout the country, or at over 500 EcoCash branded merchant outlets across the country.
Following the reduction in transfer charges, a registered EcoCash customer will pay a total of US$0.33 (US$0.20 IMT tax, and US$0.13 EcoCash fee) when sending US$10.
Those cashing out US$10 will be charged US$0.17 in transaction charges.
Sending US$50 now attracts a 2% tax of US$1.00 and a US$0.65 transaction charge, bringing the total transfer fees to US$1.65, while those cashing out US$50 will be charged US$0.85.
Sending US$100 will cost US$3.30 – made up of US$2 in tax and US$1.30 in transaction fees. Cashing out US$100 attracts US$1.70 in charges. | <a href="https://www.herald.co.zw/ecocash-slashes-its-us-dollar-transfer-charges/">The Herald</a>

EcoCash Lowers Its US Dollar Transfer Charges

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>

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