Govt to tax mobile money transfers

HARARE - Zimbabwe's cash-strapped government has imposed a tax on mobile money transfers as part of efforts to raise funds and widen its revenue base.

Finance minister Patrick Chinamasa, in his 2014 budget, stated that every mobile money transaction will attract a $0,05 levy.

This comes on the back of dwindling government revenues, which have been declining due to slow-down in economic activity evidenced by low aggregate demand, falling international metal prices, high cost of borrowing and limited access to capital.

In November, government revised downwards its revenue projection for 2013 from the initial $3,9 billion to $3,76 billion owing to the poor performance of the economy.

Chinamasa — whose 2014 budget was short on funding — said “the emergence of mobile technology has opened doors to innovative technology which facilitates transfer of funds through mobile phones,” adding that “this product should, however, conform to the tax principle of fairness, hence, the current tax on similar products such as Automotive Teller Machines (ATM) and Point of Sale (POS) should apply.”

“This new phenomenon has provided greater flexibility and financial inclusivity to the majority of the population in remote areas where banking services are not available notwithstanding the positive impact of mobile banking services on the welfare of the then financiallyexcluded members of our society,” he said.

However, political analyst Jonathan Gandari was critical of the proposed charge on mobile money transfers saying it was further taxation of the poor who were the majority users of this new system.

“The taxation of mobile money transfers will hit the poor more and is likely to retard the growth of the mobile money. Many people may be forced to use other traditional means of sending and receiving money,” he said.

Zimbabwe’s largest mobile telecommunications company, Econet Wireless Zimbabwe (Econet), which operates EcoCash — the country’s largest mobile money transfer platform — yesterday advised its customers of an
increase in transaction costs.

“We would like to inform our valued customers that a transaction tax of 5 cents will be levied on applicable transactions effective January 01, 2014. This adjustment is in line with the recently announced budget statement by the government,” said Econet.

Since its launch in 2011, 2,3 million Zimbabweans have registered for EcoCash mobile money accounts, outnumbering all of Zimbabwe’s traditional bank accounts combined.

Over one million of these accounts are active and push $200 million of volume over the EcoCash platform every month. NetOne’s OneWallet, Telecel Zimbabwe’s TeleCash and CABS’s TextaCash are some of the mobile-based funds transfer platforms to be taxed by government.

Comments (3)

Taxed to death to make the pockets of a few very fat, is painful.

uhhhh - 3 January 2014

chihurumende chembavha.

kedu - 4 January 2014

Taxed to death .....taxed wen i earn ,wen i buy ,wen i save ,wen i help (transfer money) ,wen i retire (pension)

KK - 6 January 2014

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