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2% transaction tax rakes in ZWL$2,7billion in 2019

The Zimbabwe Revenue Authority (ZIMRA) today reported a 1396,73% growth in intermediated money transfer tax (IMTT) in 2019 to ZWL$2,7 billion compared to the same period the prior year, as the economy relies on electronic payments.

The controversial 2% tax on transactions introduced by Finance Minister Mthuli Ncube is deducted on electronic transactions and was largely seen as a means to tax the informal sector as the economy increasingly informalised. However, it also meant those in formal employment were taxed twice.

There was an 8,2% positive variance between the Ministry of Finance budgets for the revenue head against actuals largely due to inflation.
The IMTT contributed significantly to a 345,7% growth in gross revenue collection in the period under review at a total of ZWL$23,9billion. The annual revenue collection growth was however below the implied annual inflation rate which breached the 500% mark.

The authority collected net revenue of ZWL$23,19 billion against a target of ZWL$18,60 billion for the year ending 31 December 2019 (24,65% above target). In an update of operations, Zimra said transit cargo movement was expedited through increased utilization of systems for electronic sealing and clearing agents licensing, complemented by implementation of the Authorised Economic Operators (AEO) programme.

On the customs ICT system, automation work on the upgrade of the ASYCUDA system improved, and these automation efforts have helped ZIMRA in the use of data for compliance management.

Nicole Madziwa

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