Govt says 8% transaction tax to stay

**Deputy Finance Minister, David Mnangagwa**

Nyashadzashe Ndoro

Chief Reporter

Companies in Zimbabwe are facing high transaction costs, totalling around 8%, which includes a 5% bank charge, 2% IMTT, and 1% administration fee by the Reserve Bank of Zimbabwe.

However, the government has refused to intervene, leaving businesses to bear the burden, which ends up being carried by consumers who are buying expensive goods and services.

Deputy Minister of Finance, David Mnangagwa, stated in Parliament on Wednesday that the government has taken a policy of non-interference in bank charges and transaction costs.

“In as far as the high transaction charges, Madam Speaker that is still within the ambit of the banks. We have taken a policy of non-interference in terms of bank charges and transaction costs, but continue to engage our banks to reduce some of these fees to make it easier and more accessible to use electronic money,” he said.

However, when questioned about the impact of these high transaction costs on businesses, Mnangagwa seemed unconcerned.

“We are not too concerned about the pricing of these goods, but rather the exchange rate that is being used,” he said.

The government’s focus on the exchange rate, rather than the high transaction costs, has raised concerns among businesses.

“Will those manufacturers and retailers be able to recover the cost if they are allowed to sell at the prevailing interbank rate?” asked Mbizo legislator Corban Madzivanyika.

“Hon. Minister, my question is, are the retailer prices not cost-recovery prices? Hon. Minister, when we compare the transactional charges for a company to get money from the bank, the bank charges 5%.

“Then next there is IMTT, which has been increased to 2%. Lastly, there is 1% administration fee by the Reserve Bank of Zimbabwe and the total is around 8%. So, will those manufacturers and retailers be able to recover the cost if they are allowed to sell at the prevailing interbank rate? Is it possible Hon. Minister, to look into that so that you do not polarise who are doing business legally?”

Mnangagwa’s response did not address the concern.

“We will take no notice or heed to the pricing and rather let market forces deal with that, but what we will monitor is the exchange rate,” he said.