2 cents tax pay­ing div­i­dends: ED

The Herald (Zimbabwe) - - Front Page - Felex Share Se­nior Re­porter

THE 2 cents in­ter­me­di­ated money trans­fer tax re­cently in­tro­duced by Gov­ern­ment is help­ing the coun­try to sig­nif­i­cantly nar­row its bud­get deficit, Pres­i­dent Mnan­gagwa has said.

Re­spond­ing to ques­tions from del­e­gates at the 3rd an­nual Pub­lic Sec­tor Au­dit Con­fer­ence in Harare yes­ter­day, the Pres­i­dent said the tax was crit­i­cal in trans­form­ing the econ­omy.

Del­e­gates had ar­gued that the tax was con­trary to the ease of do­ing busi­ness push.

Pres­i­dent Mnan­gagwa re­sponded: “I do not think it is a hin­drance. It has helped us a lot now to nar­row the deficit gap in our econ­omy.

“Yes, ini­tially when it was ar­tic­u­lated by the Min­is­ter of Fi­nance and Eco­nomic Devel­op­ment (Pro­fes­sor Mthuli Ncube) it had over­looked a lot of peo­ple who in our view ought to have been left out. He did his best to re-ex­plain it and move out from com­pli­ance many cat­e­gories whom we think would cause a pro­hib­i­tive man­ner in do­ing busi­ness.”

Un­der the new tax, trans­ac­tions be­tween $10 and $500 000 at­tract a 2 cents per dol­lar tax in mea­sures an­nounced by Prof Ncube to raise rev­enues and re­duce Gov­ern­ment bor­row­ing, es­pe­cially through the is­suance of Trea­sury Bills and a Re­serve Bank of Zim­babwe (RBZ) over­draft fa­cil­ity.

Statis­tics show the bud­get deficit dur­ing the first nine months of the year stood at $2,5 bil­lion.

Pres­i­dent Mnan­gagwa said the tax would be re­viewed con­tin­u­ously.

“What is left can still be im­proved on if you put a good ar­gu­ment,” he said.

“For you to put a good ar­gu­ment, you must first of all have some­thing that you are ar­gu­ing against. Be­fore we do it, we can­not ar­gue. Now that it is there, you have a case. Come for­ward with it and ar­gue that it is not good and we also have our case that we have put a tax. This is democ­racy. The best ar­gu­ment of the day will suc­ceed, but for now, it is there.”

He added: “The Min­is­ter of Fi­nance will be mak­ing a bud­get state­ment soon. I think it is be­fore the end of this month. I can safely say he will also look at that in or­der to im­prove. I don’t know whether it will be your po­si­tion or mine.”

Re­duced Gov­ern­ment bor­row­ing from the lo­cal mar­ket will al­low the man­u­fac­tur­ing sec­tor to ac­cess funds from banks for re­tool­ing and mod­erni­sa­tion as the econ­omy gears to ramp up pro­duc­tion.

The new tax does not ap­ply to eight types of trans­ac­tions, namely in­ter-com­pany trans­fer of funds, in­clud­ing trans­fers of in­ter­me­di­ary ac­counts; trans­fer of funds on sale and pur­chase of eq­ui­ties; trans­fer of funds on pur­chase and re­demp­tion of money mar­ket in­stru­ments; trans­fer of funds for pay­ment of salaries; and for pay­ment of taxes. It also does not ap­ply to trans­fer of funds to in­ter­me­di­ary ac­counts, trans­fer of funds in re­spect of for­eign cur­rency-re­lated pay­ments and trans­fer of funds by Gov­ern­ment.

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.