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2% tax court challenge revived

by Staff reporter
24 Oct 2018 at 06:40hrs | Views
COMBINED Harare Residents' Association (CHRA) director Mr Mfundo Mlilo has filed a normal court application contesting the recently announced 2 percent tax on electronic money transfers, following the dismissal of his initial challenge for lack of urgency.

Mr Mlilo, who is being represented by Mafume Law Chambers, also seeks nullification of Statutory Instrument 205-2018 which is the enabling law for the implementation of the new tax regime.

Last week, Mr Mlilo filed an urgent interdict to block the implementation of the new tax regime, but the High Court ruled it to be not urgent.

In a bid to resuscitate the challenge, Mr Mlilo on Monday filed a normal court application for a constitutional declaratory order to stop banks from charging 2 percent tax on every transaction above $10.

Finance and Economic Development Minister Mthuli Ncube was cited as the sole respondent in his official capacity.

Minister Ncube introduced the tax a fortnight ago in his Transitional Stabilisation Programme (TSP) that came into effect last week.

In his application, Mlilo argued that the Government's decision was made without the necessary backing of the law, citing in particular the amendment of the income tax or the regulation of the tax in a Statutory Instrument.

Mlilo further argued that on October 12, Minister Ncube enacted the Finance (Rate and Incidence of Intermediated Monetary Transfer Tax) Regulations Statutory Instrument (SI205-2018) to legalise and actualise his announcement done on October 1, 2018.

He said the Statutory Instrument remained unconstitutional and a nullity, arguing the minister cannot amend an Act of Parliament in terms of the  law.

To this end, Mr Mlilo wanted the higher court to put on hold the minister's decision to review the intermediate tax from five cents per transaction to two cents per dollar.

The activists also wanted the immediate suspension of the Finance (Rate and Incidence of Intermediated Money Transfer Tax) Regulations published in SI205 /2018.

President Mnangagwa recently put more weight on the intermediary money transfer tax of 2 cents saying it would remain in force.

The tax, he said, was critical in transforming the economy that has suffered from two decades of stagnation. The President said the tax was not designed to hurt the ordinary people and companies, but to help the manufacturing sector to get funds for retooling and modernisation as the economy gears to ramp up production.

He hinted there was room for the tax to be refined going forward if suggestions were proffered, to create a win-win situation for individuals and companies.

Source - the herald

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