Harare introduces electronic transaction tax

Finance and Economic Development Minister Mthuli Ncube has announced a two cents per dollar tax on electronic transactions as Zimbabwe moves to widen its tax base. He said due to the increase in the ‘informalisation’ of the economy and huge spikes in electronic and mobile phone-based financial transactions and real-time gross settlement transactions (RTGS), ‘there is (the) need to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions and the RTGS system’. A report on the Fin24 site notes that while the new tax seems like a downward review, it isn’t, as consumers will now be charged on every dollar spent, whereas in the past it was five cents for every transaction, including those above $1. The new tax effectively means most Zimbabweans will have to fork out more in tax for every dollar as more than 96% of the transactions conducted are electronic.