LIVINGSTONE MARUFU
President Emmerson Mnangagwa has said the 2 percent intermediated transfer tax is here to stay as the country moves to widen its tax base.
Last week, Finance minister Mthuli Ncube reviewed the tax to 2 percent per dollar for any transaction above $10 from 5 cents per transaction. Ncube said transactions above $500 000 would attract a flat tax of $10 000.
The development comes at a time when price of all basic commodities have gone up by up to 50 percent.
Speaking at PROWEB Women’s breakfast meeting, President Mnangagwa told the assembly that the liberalisation of the economy has its own pains but would adjust going forward.
“Looking at the times we have now both internal and external debt, when we look at ourselves as Zimbabweans for us to be a viable economy, we are going to take such measures and this is one such measure. We will always improve as we move forward and this is the beginning,” he said.
“There’s a list of such exemptions and we have taken cognisance of the fact that we don’t want to burden or punish our people but a necessary step going forward.
“We are going to take such measures that are painful to achieve a strong economy.”
Mnangagwa’s remarks are a major boost for Ncube who has faced a barrage of attacks for his reforms. The former African Development Bank chief economist and vice president was last month appointed as Finance minister last month as Mnangagwa builds a strong team to steer the economy.
Under the new tax, a number of transactions such as intra-company transfers, salary transfers, foreign currency-related payments, transfer of funds by government and between companies to companies, salaries and the employment transactions, transfer on purchase and sale of equities and purchase and redemption of money market instruments.
