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Zanu PF blocks MDC bid to scrap 2% tax

by Staff reporter
24 Dec 2018 at 19:32hrs | Views
A BID by the main opposition MDC Alliance legislators to have the 2% transaction tax cut to 0,5% hit a snag in the National Assembly when Zanu PF legislators used their majority to vote for its implementation.

Parliament last Thursday had to sit until the wee hours of morning as MPs debated clause 4 of the Finance No. 3 Bill to do with the 2% transaction tax.

However, after a very heated debate, Buhera South MP Joseph Chinotimba (Zanu PF) suggested that the House votes for the fate of the 2% tax.

On Tuesday, Finance minister Mthuli Ncube claimed that Zimbabweans had embraced the 2% tax on electronic transactions, a statement which attracted a social media backlash.

Dzivarasekwa MP Edwin Mushoriwa (MDC Alliance) said the 2% tax was punitive to the ordinary person, adding the charges for transacting using EcoCash were actually lower than the 2% tax.

"In my view, the 2% tax should actually be reduced to as low as half percent (0,5%) because 2% is too much, and I believe it is not right and everyone is crying," Mushoriwa said.

"Schools are complaining, saying the 2% tax is damaging because whenever they transfer money to [Zimbabwe School Examinations Council] Zimsec, they are charged that 2%, and it needs to be modified because we cannot have a blanket punitive penalty like this," he said.

Kambuzuma MP Willias Madzimure (MDC Alliance) said the 2% tax was penalising rural people, who mostly use EcoCash to transact.

"Which people were consulted on the 2% tax, and what did they say? No consultation was carried out, even among the MPs," Madzimure said.

Pelandaba Mpopoma MP Charles Moyo (MDC Alliance) said what forced people to use electronic transactions was the cash crunch in the country.

"Make cash available at banks so that people can withdraw their money rather than using electronic transactions so that you charge them the 2% tax," Moyo said.

Harare East MP Tendai Biti (MDC Alliance) said his qualm with the 2% tax was to do with the statutory instrument that sought to introduce the tax as well as seek to amend substantive provisions of the Income Tax Act, which used to charge $0,5 cents per transaction.

"Section 134 of the Constitution says it is only Parliament which makes the laws, so when the Minister of Finance and Economic Development on October 12, 2018 made law by repealing Section 22(g) of the Income Tax Act Chapter 23:06, he breached Section 134 of the Constitution," Biti said.

But Justice minister Ziyambi Ziyambi said if the 2% tax was illegal, it would be dealt with by the Parliamentary Legal Committee.

Biti said the bad thing about the tax was that people did not have disposable income, with 95% unemployed, and 79% living in extreme poverty and surviving at less than $1,25 per day.

Ncube said MPs had cornered him into approving a $145 million budget for Parliament and so the money would come from the 2% tax.

"You are arguing for cars and where do you think the monies are coming from? We are allocating $310 million to constituencies and where do you think the money is coming from? It is coming from the 2%," Ncube said.

Source - newsday