4% tax hits Zim banks
PHILLIMON MHLANGA
Zimbabwe banks are feeling the pinch of the intermediate money transaction tax (IMTT) in United States dollars, forcing depositors to shun the financial institutions, the Bankers Association of Zimbabwe president, Mehluli Mpofu.
The objective of the IMTT was to bring untaxed informal businesses under the tax bracket. But Mpofu, who spoke at the Zimbabwe Independent Banks and Banking Survey and Awards ceremony held in the capital yesterday, said the impact of the tax has put pressure on the financial institutions.
This has had a double taxation effect on formal operators.
“The 4% cost of transaction in United States dollars, the intermediary tax, is hitting the banks,” Mpofu said.
He added: “As a depositor say if I bank my United States dollars and want to transfer, I will lose 4%. They will also say if I walk to wherever I want to transact with hard currency in cash, I will not lose anything. So, the government and ourselves (banks) need to play our part in that regard so that people or businesses will bank their hard currency.”
While banks and other formal businesses are feeling the pinch of the tax, it is too lucrative for the Finance and Economic Development Minister, Mthuli Ncube to change.
The Treasury boss is on record saying the IMTT has turned perennial budget deficits to surpluses. Zimbabwe relies heavily on taxes to fund its operations as it has no external budget support like many other countries.
