Zimbabwe changed the way it taxes mobile money from a fixed fee to a percentage of the value of each transaction, as the state eyes a greater share of the proceeds from use of the burgeoning technology.
In a statement outlining the country’s new fiscal policies, finance minister Mthuli Ncube announced the “money transfer tax”, which covers all online cash payments. Reserve Bank of Zimbabwe figures show 755 million mobile money transactions were processed in 2017 to a combined transaction value of ZWD18 billion ($49.7 million).
The new approach increases the levy from a set ZWD0.05 per transaction, to 2 per cent of the value of each payment. Under the old system, the tax levied on the 2017 total would be around ZWD38.75 million: using the new system the amount rises to ZWD360 million.
Transaction numbers up to end-September had already hit 1.7 billion, Ncube said.
In his statement, the minister said the new tax rules were, in part, a response to “the huge increase in electronic and mobile phone based financial transactions.”
The country is in the process of trying to raise revenue to reduce its budget deficit and stabilise the economy.Subscribe to our daily newsletter Back