The Confederation of Zimbabwe Industries went after the government for keeping the Intermediated Money Transfer Tax around despite warnings that it wrecks production and makes businesses less competitive. Finance minister Mthuli Ncube dropped the rate on ZiG transactions to 1.5% from 2% but left forex transfers at 2%, which CZI said still creates a cascading tax problem where the same money gets hit multiple times as it moves through supply chains.
The levy hits every electronic payment at full value, whether companies are profitable or bleeding cash, and it can't be recovered on exports. CZI pointed out that formal business activity shrank to 23.9% from 40% while the informal sector dodges the tax entirely by using cash, which pushes people away from digital banking and hurts financial inclusion goals.
The levy hits every electronic payment at full value, whether companies are profitable or bleeding cash, and it can't be recovered on exports. CZI pointed out that formal business activity shrank to 23.9% from 40% while the informal sector dodges the tax entirely by using cash, which pushes people away from digital banking and hurts financial inclusion goals.
