03 Oct Zimbabwe slaps tax on mobile money, online transactions
Zimbabwe’s government has raised statutory taxes on mobile money and electronic transactions in a fresh bid to secure additional revenue within the cash-strapped country.
Mobile money transfer tax has been revised from 5 cents per transaction to 2 cents “per dollar” transacted, effective immediately according to Finance Minister Mthuli Ncube.
Ncube said: “Due to the increase in informalisation of the economy and huge increase in electronic and mobile phone based financial transactions and RTGS transactions there is need to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions and RTGS system.”
According to the Zimbabwean Finance Ministry, about 1.7 billion transactions have been effected through mobile money in the country so far this year.
This is a sharp increase from the 50 million transactions via e-platforms four years ago.
In 2003 Zimbabwe introduced the Intermediated Money Transfer Tax and in 2016 introduced a 5% health tax levied from airtime and mobile internet top-ups.
Now, the country’s Treasury chief has directed that “financial institutions, banks and the Zimbabwe Revenue Authority work together with telecommunication companies to extend the collection to all electronic financial transactions”.
Mobile money platforms have become regular transaction platforms in a country struggling for liquidity, leading to the growth of EcoCash bank wallet platform run by Econet.
Rival offerings such as One Money, run by NetOne, and Telecash operated by Telecel Zimbabwe have also gained traction in the market.
Strive Masiyiwa’s Econet is now pursuing separate listing of the mobile money platform.
In a related development John Mangudya, Governor of Reserve Bank of Zimbabwe, has directed that banks separate foreign currency and local funds accounts as from 15 October 2018.
Zimbabwe currently uses a multiple currency system under one bank account, with the government pegging the US dollar at a value of 1:1 versus local bond notes (local currency).
There have been stronger calls for the government to abandon the bond notes which have plummeted in value against the greenback.
“These FCA account deposits include free funds, remittances and export earnings,” said Mangudya.