De Fungi Kwaramba
President Emmerson Mnangagwa says he will shortly revise the two cents for cash transaction tax from Finance Minister Mthuli Ncube, which caused widespread panic in the country when he was introduced last month.
This comes after the Daily News reported accurately at the time that when the Ncube announced its tax he did not have Mnangagwa's approval.
As it is, the Ncube has already been forced to eat humbly after being forced to adjust the unpopular tax shortly after it was announced – following a huge public reaction that made panic buyers hoard goods and commodity prices at a sharp high .
Writing in his weekly column in state media yesterday, Mnangagwa said his government would soon see two cents on a dollar of tax.
"The government took seriously the cry that the two-percent transactional tax compounded the tax burden for both business and consumer.
"Once the legal instrument we are drafting against unexplained wealth and deposits is in place, new measures will be announced to revise the tax that, among other considerations, was brought about by illicit activities in the financial services industry," he said.
Recently, a civil society group filed a petition with the Supreme Court to have the tax declared illegal. However, the matter was decided not urgent and therefore goes in the normal role of the court.
The Ncube introduced two cents to the dollar as part of a series of economic measures aimed at reviving the country's unhealthy economy.
"On the occasion of the presentation of the Intermediate Monetary Policy of 2018, I announced a revision of the Intermediate Currency Transmission Tax of the current 5 cents per transaction to 2 cents for every dollar transacted.
"Further details regarding the tax are as follows: The tax of 2 cents per dollar will apply only to transactions of $ 10 and above. Transactions under $ 10 will be exempt from this tax.
"There is a $ 10,000 ceiling on the amount of tax to be paid. That implies that transfers over $ 500,000 will attract a flat rate of $ 10,000, "he said in announcing his revised measures.
The Ncube also said that internal transfers from companies, as well as salary transfers, tax payments, foreign currency-related payments and transfers of funds by the government would also be exempt from the new tax.
Yesterday, University of Zimbabwe political science professor Eldred Masunungure said that the developments of the past few weeks have suggested that the Ncube needed to "mold" – otherwise he would be forced to resign by the old guard in Zanu PF . "
"Mthuli is a technical expert. He has the skills to do the job, but … given the vicious minefield in which he finds himself, he will have difficulty navigating the politics of Zanu PF.
"He is a newcomer to our policy and needs to improve his policy. But I do not think he's going to get it.
"He either has to learn politics quickly or prepare to resign. I am not surprised that the two percent tax is now revised, "Masunungure told the Daily News.
Following the announcement of the tax, Ncube was forced to hold an emergency meeting with Vice President Constantine Chiwenga and Zimbabwe Central Bank Governor John Mangudya – leading to the release of the revised tax measures.
This happened after Mnangagwa had apparently ordered his deputy to investigate the issue, which caused panic among Zimbabweans, who made supermarkets buy anything they could get their hands on in a parallel market in which exchange rates they had hit the ceiling. .
Ncube's relationship with Zanu PF's hawks is said to be tense after they attacked him for hurrying to announce the tax without consulting the hierarchy of the former liberation movement. Daily News