News / Local
Intermediated Money Transfer Tax reduced from 4 to 1%
19 Jun 2023 at 13:10hrs | Views
Mobile money customers are happy that the government has reduced the Intermediated Money Transfer Tax (IMTT) on domestic foreign currency transactions from 4% to 1%.
The reduction, which was announced last month, has beem welcomed by many mobile money users – in particular EcoCash users – who use the platform for sending money, paying bills, buying airtime and conducting online payments.
"I'm very happy with the government's decision to reduce the IMTT to 1%," said Tendai Makosa, a frequent EcoCash user.
"It means that I can now send money to my family and friends without worrying about the high transaction fees. It's a great relief for me and many others."
The IMTT on local foreign currency transactions was introduced in May last year. The tax was initially set at 4% per transaction, but was later reduced to 2% by January of this year.
But for many EcoCash customers, the reduction in IMTT could not have come at a better time.
"I used to pay lot of money in transaction fees every month," said Alice Pasipanodya, a mother of two, saying the reduction had made a significant difference her life.
"But now, with the reduction in mobile money tax, I get to save more money and use it for other important things," she added.
According to a tariff schedule on the EcoCash website, Cash-in is free, while sending money to a registered customer now attracts a charge of 2.3% – inclusive of 1% tax and 1.3% tariffs. At the same time, the receiver will only be charged 1.7% when cashing out.
This means when sending US$100 to your loved ones, receivers will now pocket US$96 cash, a big jump from the US$88 they would receive when the charges were still pegged at 4%.
The reduction in the IMTT levy has also been lauded by businesses and entrepreneurs, that rely on mobile money transactions for their daily operations.
"As a small business owner, I use the EcoCash USD wallet to pay my suppliers and receive payments from my customers," said Tapiwa Makotose, a Gweru-based entrepreneur.
"The high transaction fees were a big burden for me, but now with the reduction in the IMTT, I can save more money and reinvest it in my business."
The latest development comes after EcoCash Holdings Zimbabwe Limited chairperson Sherrie Shereni said the group was already noticing a significant increase in mobile money transactions following the initial reduction of IMTT from 4% to 2% early this year.
"The reduction of IMTT on US dollar domestic money transfer transactions from four percent to two percent effective January 1, 2023, has helped adopt and use of US dollars on digital money transfer services," she said in the group's financial statement for the year ended February 28, 2023.
"We are continuously improving access and convenience for our customers by growing our distribution footprint across the country," Mrs Shereni added.
The reduction, which was announced last month, has beem welcomed by many mobile money users – in particular EcoCash users – who use the platform for sending money, paying bills, buying airtime and conducting online payments.
"I'm very happy with the government's decision to reduce the IMTT to 1%," said Tendai Makosa, a frequent EcoCash user.
"It means that I can now send money to my family and friends without worrying about the high transaction fees. It's a great relief for me and many others."
The IMTT on local foreign currency transactions was introduced in May last year. The tax was initially set at 4% per transaction, but was later reduced to 2% by January of this year.
But for many EcoCash customers, the reduction in IMTT could not have come at a better time.
"I used to pay lot of money in transaction fees every month," said Alice Pasipanodya, a mother of two, saying the reduction had made a significant difference her life.
"But now, with the reduction in mobile money tax, I get to save more money and use it for other important things," she added.
According to a tariff schedule on the EcoCash website, Cash-in is free, while sending money to a registered customer now attracts a charge of 2.3% – inclusive of 1% tax and 1.3% tariffs. At the same time, the receiver will only be charged 1.7% when cashing out.
This means when sending US$100 to your loved ones, receivers will now pocket US$96 cash, a big jump from the US$88 they would receive when the charges were still pegged at 4%.
The reduction in the IMTT levy has also been lauded by businesses and entrepreneurs, that rely on mobile money transactions for their daily operations.
"As a small business owner, I use the EcoCash USD wallet to pay my suppliers and receive payments from my customers," said Tapiwa Makotose, a Gweru-based entrepreneur.
"The high transaction fees were a big burden for me, but now with the reduction in the IMTT, I can save more money and reinvest it in my business."
The latest development comes after EcoCash Holdings Zimbabwe Limited chairperson Sherrie Shereni said the group was already noticing a significant increase in mobile money transactions following the initial reduction of IMTT from 4% to 2% early this year.
"The reduction of IMTT on US dollar domestic money transfer transactions from four percent to two percent effective January 1, 2023, has helped adopt and use of US dollars on digital money transfer services," she said in the group's financial statement for the year ended February 28, 2023.
"We are continuously improving access and convenience for our customers by growing our distribution footprint across the country," Mrs Shereni added.
Source - The Herald
