Zimbabwe just tweaked its 2% transaction tax instead of killing it completely like business groups wanted, and Finance Minister Mthuli Ncube dropped the rate on local currency deals to 1.5% while keeping the US dollar levy at 2%. The government is letting companies write off the tax as a business expense if they stay current with their returns and payments, plus they expanded coverage to microfinance institutions.
Business lobbies have been screaming about how the tax crushes formal operations and pushes everyone into the informal economy, but Ncube said the levy brings in 8% of total tax revenue, and they can't just dump it. The changes kick off next year and will cost the government about $89 million annually in lost revenue, but compliance requirements mean only registered and tax-current businesses get the deduction perks.
Business lobbies have been screaming about how the tax crushes formal operations and pushes everyone into the informal economy, but Ncube said the levy brings in 8% of total tax revenue, and they can't just dump it. The changes kick off next year and will cost the government about $89 million annually in lost revenue, but compliance requirements mean only registered and tax-current businesses get the deduction perks.
