Eddie Cross, a member of the Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee (MPC), said that if he was the finance minister, he would raise the Intermediated Money Transaction Tax (IMTT) from the current 2% to 5%.
Cross feels the 2% being collected by the Treasury is “nothing” and should be hiked to 5%. He said:
Because 2%, (is) 2 cents in a dollar for God’s sake its nothing. We don’t notice it, okay, but it balances our budget and today it is the biggest source of revenue than VAT (value-added tax) and everybody pays it.
Moreover, it is the most efficient tax in our system. It costs us nothing to collect, and it’s an electronic transfer.
And to me that’s the way to go, that’s the future, the past is PAYE (Pay As You Earn), corporate tax and other things.
If I was the Minister of Finance, I would increase that to 5%.
The Intermediated Money Transaction Tax, which is a 2% tax on all electronic financial transactions, was introduced in October 2018 by Finance Minister Mthuli Ncube as part of the government’s Transitional Stabilisation Programme (STP).
The tax was not well-received by the transacting public as it has made the use of electronic money more expensive at a time when cash shortages have become part of everyday life.
