Zimbabwe’s president Emmerson Mnangagwa vowed to review a controversial 2 per cent electronic money transfer tax following fierce criticism of the levy from consumers and businesses.
Writing in a column in national newspaper Sunday News, Mnangagwa added the government “took to heart the cry that the 2 per cent transactional tax has compounded the tax burden for both business and for the consumer” and would reassess it along with upcoming laws covering the financial sector.
The tax was unveiled alongside a number of other cash-raising measures by Zimbabwe’s finance minister Mthuli Ncube in October. It replaced a previous set fee levied on the cost of mobile money transfers with a percentage of the total value of each payment.
Using official 2017 statistics on total mobile money transaction value, the tax hike increases government takings from the service by almost ten times.
The move proved extremely unpopular in the country. The Standard last week reported Ncube was forced to apologise to a parliamentary committee for not engaging with businesses, stakeholders or consumers before introducing the “ill-thought-out” tax.
Ncube’s comments come as analysts in the country told the newspaper prices had “shot up” for customers with some reporting an 18 per cent drop in mobile transactions. The experts also forecast the tax would weigh on earnings for companies not passing the extra charges straight to consumers.