By Alois Vinga
MDC Alliance President Nelson Chamisa Thursday called for the immediate scrapping of government’s contentious 2% tax to spur business growth before he went on to criticise the state for failing to avail Covid-19 stimulus packages to local companies.
Speaking in a virtual national address on his Facebook page on the Covid-19 pandemic, the opposition leader said the 2% tax and other tariffs imposed by government must be removed with immediate effect to ease the burden on the operations of private companies and ordinary citizens.
“The government should consider a number of fiscal measures aimed at reducing tax burden for businesses and individuals through the immediate removal of the 2% tax to spur business growth,” he said.
Also known as the Intermediated Mobile Money Transfer Tax (IMMT), the 2% tax is deducted on all electronic transfers made and has gone a long way in boosting the cash-strapped government’s revenues. It was gazetted in October 2018.
Last year, the government further extended the collection of the 2% tax on all foreign currency transactions raising concerns among businesses the collections were adversely affecting their commercial growth.
Finance Minister Mthuli Ncube has since then repeatedly defended the controversial IMMT saying the government would never scrap it.
“We will not scrap the 2% tax because it helps us on the compliance front, in terms of lowering tax,” he has said.
Chamisa also slammed the government for failing to offer stimulus packages to save businesses from collapse due to limited production as a result of the Covid-19 induced national lockdown.
He argued the $18 billion package extended by government to large businesses and $600 million to small and medium enterprises last year, was only a drop in the ocean.
“This is so considering that the economy requires funding in the region of US$5 billion. We call upon the government to come up with a reasonable package to save businesses both large and small,” he said.
Chamisa added the Reserve Bank of Zimbabwe (RBZ) must to allow banks to take full control of foreign exchange trading with a view of minimising disparities between the formal rate and informal rate to below to below 10%.
Currently, foreign exchange trading is being conducted weekly by the RBZ through an auction system.