By Daniel Chigundu
FINANCE and Economic Development Minister Patrick Chinamasa says he is going to scrap the 5percent tax on all electronic transfers below US$10 to make it cheaper to transact.
Electronic transfers are said to be on the high in Zimbabwe owing to the various taxes which are then passed on to the customers when they eventually transact.
According statistics, electronic transfers in Zimbabwe are ranging to about US$90 billion per year largely driven by RTGs us$62 billion and mobile banking US$28 billion, while cash only accounts for US$7billion.
Bulawayo East legislator Eddie Cross had wanted government to introduce a further 5 percent tax on electronic transfers as a revenue generating measure.
Honourable Cross’s sentiments were seconded by Norton legislator Temba Mliswa who said the call was a step in the right direction to close the budget deficit in 2018 budget.
However, speaking in the National Assembly Minister Chinamasa said a further tax will discourage progress made towards a cashless society move.
“You mentioned something about putting a tax on electronic transactions. I do not agree because, at the moment it exists, and I am removing it because I want to encourage progress the path towards electronic transfers, that is the future. We must move towards a cashless society.
“While I am conceding that at least about 10 percent of transactions will remain cash, the future lies in electronic transfers. To encourage it, I am removing the cost of being charged on electronic transfers. The amendment that I am going to bring will say that, any transaction below US$10, through mobile and so on; I am removing the five cents in a dollar which was currently tax.
“There was a tax already; I am removing it to make it cheaper for people to transact business. I am sure that you will accept the point that if we impose an onerous tax, it will discourage people from transacting electronically. So, the argument is that we should instead encourage people to transact business electronically,” he said.
Minister Chinamasa added that he agrees with Honourable Cross on the need to increase the cake instead of rationalising the civil service adding that “a lot of the measures that we have put in place in the current budget are to encourage production,” he said.