Treasury standardises IMTT for ZiG, US dollar

Source: The Herald – Breaking news.

Treasury standardises IMTT for ZiG, US dollar 
Minister Ncube

Business Reporter 

TREASURY has standardised the intermediated money transfer (IMTT) tax rates on Zimbabwe Gold (ZiG) and US dollar transactions at 2 percent for values up to US$100 or the local currency equivalency.

The transaction tax now also applies to transactions for gold-backed digital tokens (GBDTs).

A lower rate of US$0,05 per dollar will apply on any transaction above US$100 or the equivalent value in ZiG at the ruling interbank exchange rate.

The new provisions are contained in Statutory Instrument (SI) 80 of 2024,  Section Three of the Finance Act.  The new regulations may be cited as The Finance (Amendment of Sections 22B and 22G) Regulations, 2024

According to the regulations, IMTT tax is now levied at 2 percent across transactions in ZiG, US dollars and GBDTs.

However, the Treasury said for a single transaction equivalent to or exceeding US$500 000 in both currencies, a flat IMTT of US$10 150 or the equivalent in ZiG shall be chargeable at the going interbank rate.

In terms of the new regulations, the IMTT for US dollar transactions has been doubled to 2 percent. Businesses have lobbied for its reduction or alright removal, arguing it’s a significant cost to the business.

Captains of industry and commerce argued that the transaction tax is one among others that include corporate tax, value-added tax, and cost of funding, which businesses are battling to meet.

The IMTT is a significant revenue earner for the Government. The Treasury is on record saying the tax would not be scrapped anytime soon due to the Government’s limited financial resources and the huge impact it has had on key Government programmes.

Last week, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu told a Parliamentary Portfolio Committee on Industry and Commerce that Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube had agreed to standardise the rates because it was beginning to create a situation where there was an implied rate for ZIG arising out of the tax differentials.

The Zimbabwe National Chamber of Commerce (ZNCC) says the IMTT exerted pressure on the already overtaxed formal businesses.

The business lobby group says while the IMTT was introduced to bring the informal market into the taxation bracket, this meant double taxation for registered companies.

In terms of the new provisions, a tax rate of 2 percent will also be charged on every dollar of all foreign payments.