Government yesterday gazetted into law the 2% tax on electronic transactions that was proposed by Finance minister Mthuli Ncube two weeks ago, triggering a spike in the black market rate of the US dollar and a wave of price increases across the country.
By Everson Mushava
Ncube proposed the new measures under the Transitional Stabilisation Programme that will run until 2020 which is aimed at widening government’s revenue collection.
The new measures were gazetted in Statutory Instrument 205 of 2018, Finance (Rate and Incidence of Intermediated Money Transfer Tax) Regulations, 2018.
“With effect from the day the promulgation of these regulations, section 22G the Finance Act (Chapter 23:04) is repealed and the following is substituted,” part of the SI read.
“With effect from the day the promulgation of these regulations, the intermediated money transfer tax chargeable in terms of Section 36 of the Taxes Act shall be calculated at the rate of zero comma zero two United States dollars on every dollar transacted for each transaction on which the tax id payable.
“Provided that if a single transaction on which the tax is payable is equivalent to or exceeds five hundred thousand United Sates dollars, a flat intermediated money transfer tax of ten thousand United States dollars shall be changeable on each transaction.”
Ncube’s proposals, widely criticised by the opposition and economic analysts as over taxation, together with government’s decision to introduce FCA nostro accounts have caused panic in the market triggering an astronomical rise in the parallel market rates of the USD.