Zimbabwe has joined the list of African countries increasing its mobile money taxes. The Zimbabwean government said the tax on mobile wallet and electronic transactions will increase from a flat five cents per transaction to two cents per dollar transacted.
In a statement showing the country’s latest fiscal policies, Mthuli Ncube who is the finance minister announced that the “money transfer tax”, which covers all online cash payments. Reserve Bank of Zimbabwe figures indicate 755 million mobile money transactions were processed in 2017 to a combined transaction value of ZWD18 billion ($49.7 million).
The new law would increase the levy from a set ZWD0.05 per transaction, to 2 per cent of the value of each payment. Under the old system, the tax levied on the 2017 total would be around ZWD38.75 million: using the new system the amount rises to ZWD360 million.
Transaction numbers up to end-September had already hit 1.7 billion, Ncube said.
In his statement, the minister said the new tax rules were, in part, a response to “the huge increase in electronic and mobile phone based financial transactions.”
The country is in the process of trying to raise revenue to reduce its budget deficit and stabilise the economy.