Infamous 2 percent tax gets lifeline

HARARE - Government's controversial implementation of a draconian two percent tax on electronic transactions has been given a lifeline after High Court judge Felistas Chatukuta yesterday ruled that the application made by a Harare social activist was not urgent.

The matter will now be heard on the ordinary roll.

Mfundo Mlilo had filed an urgent chamber application in which he sought an interdict to have the tax reversed. He described the tax as mere “beer talk” which cannot be translated into law as government has not followed due process.

However, Chatukuta, ruled that “(1)the applicant having become aware of the decision of the Finance minister on October 3, 2018 does not explain why it took him almost two weeks to file the present application. (2)The perception by the applicant that the tax is illegal is not a basis for urgency. The matter is not urgent and is accordingly removed from the urgent chamber application roll.”

Government, a fortnight ago gazetted regulations implementing the controversial two percent tax on every dollar transacted under Statutory Instrument 205 of 2018, amending Section 22G of the Finance Act Chapter 23:04.

This saw institutions among them the Zimbabwe Revenue Authority (Zimra) and telecommunication companies extending the collection of the tax across all electronic transactions.

Mlilo argued that only an amendment done through an Act of Parliament can alter the current law on tax.

Finance minister Mthuli Ncube was cited as the respondent.

“The respondent did not comply with the above. He did not table any Finance Act. He literally made an announcement in a beer hall and expects Zimbabweans to be bound by an announcement made in a pub,” Mlilo said in his application.

“Indeed pursuant to the provision of Section 36G cited above, Section 22G of the Finance Act currently provides that, the Intermediated Money Transfer Tax chargeable in terms of Section 36G of the Taxes Act shall be calculated at the rate of $0.05 for each transaction exceeding $10.00 on which the tax is payable.

“Therefore the Import of Section 22G is that a fixed charge of$0.05 is chargeable on every transaction exceeding $10,” he argues.

“The fact of the matter is that section 22G has not been repealed and remains the only lawful tax chargeable on such transactions. It follows that the minister’s directive to all financial institutions and Zimra working together with Telecommunications Companies to collect US$0,02 per every dollar is unlawful and a nullity as it infringes Section 22G of the Finance Act.”

Mlilo, who is also director of Combined Harare Residents’ Association, argued that through the gazetted regulations, Ncube “pretends that he is Parliament and therefore can amend an Act of Parliament”.

“It is my respectful contention that the Respondent has no power of amending an Act of Parliament.

“Making laws or amending laws is the primary law making function of Parliament. The Constitution of Zimbabwe is very clear.

“The respondent’s actions are such a gross violation of the principle and separation of powers codified and recognised on our Constitution.

“The regulations are thus unlawful and null and void because a minister cannot abrogate himself above Parliament.”


 

Comments (1)

That is a specious ruling.

citizen - 24 October 2018

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