‘Digital payments will curb money-laundering’ 

Source: ‘Digital payments will curb money-laundering’ – NewsDay Zimbabwe

GOVERNMENT will embrace use of digital payments to curb money-laundering and to ensure that the country transitions into a paperless economy, a deputy minister said.

This was said by Finance deputy minister Clemence Chiduwa in Parliament on Wednesday in response to questions on cash shortages.

“Where we are going is the digital economy that is in line with the National Development Strategy 1 and Vision 2030,” Chiduwa said.

“We are moving away from situations where we heavily rely on the usage of cash, and we are embracing digital technologies. Digital technologies are going to be good for us in terms of anti-money-laundering activities. We should be able to monitor who is doing what, and there is always a digital footprint when we move away from the usage of cash.”

The push towards a digital economy gained traction in 2016 when the Reserve Bank of Zimbabwe (RBZ) rolled out the first phase of its financial inclusion strategy.

The strategy has been credited for sustaining the markets during episodes of dire cash shortages.

Official data indicates that over 90% of transactions in Zimbabwe are now conducted on digital platforms.

Last week, RBZ governor John Mangudya presented his monetary policy statement, where he stated that digitisation of financial services would continue to play a pivotal role in driving access and usage of financial services during the COVID-19-induced lockdown.

According to RBZ data, the number of active mobile money subscribers increased from 4,05 million to 4,13 million during the review period.

Central bank governor John Mangudya

“Notwithstanding the COVID-19 pandemic, the national payments system remained safe, sound and stable during 2021,” Mangudya said.

“Digital payment systems transaction values continued on the exponential growth trajectory with a 218% increase from $2,5 trillion recorded in 2020 to $7,8 trillion in 2021. Transaction volumes, on the other hand, were on a declining trend, falling by 24% to 1,4 billion.”

Meanwhile, Chiduwa told Parliament that the Zimbabwe Revenue Authority (Zimra) was struggling to release tax clearance certificates for most companies.

“It is true that Zimra this time of the year, January and February, gets a lot of challenges because many companies will be looking for tax clearances. The main problem is that most companies want to pay all at once, and so our computer system crashes,” he said.

“Zimra has since rectified the system so that people can get their tax clearances on time, but that is a problem that usually occurs in January. So by now, expect that many companies have got their tax clearances.”

Companies have been complaining that Zimra’s delays have seen them being forced to pay withholding tax, which is pegged at 30% of transaction value, significantly affecting their operations.