The Intermediated Money Transfer Tax (now commonly known as the 2 cents tax) announced by Government last week, comes into effect tomorrow.
This was announced through Statutory Instrument 205 of 2018 published in the Government Gazette today. The new tax has been introduced by way of amendments to section 22G of the Finance Act (Chapter 23:04) and the Thirteenth Schedule of the Income Tax Act (Chapter 23:06).
Reads part of the statutory instrument: “With effect from the day after the promulgation of these regulations, the intermediated money transfer tax chargeable in terms of section 36G of the Taxes Act shall be calculated at the rate of zero comma zero two (0,02) United States dollars on every dollar transacted for each transaction on which the tax is payable: provided that if a single transaction on which the tax is payable is equivalent to or exceeds five hundred thousand ($500 000) United States dollars, a flat intermediated money transfer tax of ten thousand ($10 000) United States dollars shall be chargeable on such transaction.”
Finance and Economic Development Minister Professor Mthuli Ncube, proposed the tax last week, saying it was meant to expand Government’s capacity for capital funding and retooling of the manufacturing sector. Last Friday, Minister Ncube announced upper and lower limits for the Intermediary Money Transfer Tax and types of transactions to which the tax would not apply.
The SI extends the types of transactions the tax will not apply to.
Source – Herald