Senator proposes Diaspora Tax

Nyashadzashe Ndoro

Government is seized with a proposal made in the Senate that Zimbabweans living in diaspora must be taxed to improve the nation’s revenue.

The proposal was made by Senator Tsitsi Muzenda during the recent debate on Finance Minister Mthuli Ncube’s proposed 2024 budget. She also questioned if Zimbabwean teachers who were deployed in Rwanda are paying taxes back home.

“My other point is, is it possible to tax Zimbabwean citizens living in the diaspora, because other countries do that? Unless, of course, if they have renounced their Zimbabwean citizenship, then they will be exempt,” she asked.

“Also, I am not sure if I am correct, are our teachers who went to Rwanda paying local tax or they are paying tax in Rwanda?”

Ncube responded saying taxing Zimbabweans in the diaspora was something to “think about”, considering the amount of money they send back home. He added that Zimbabwe, annually, gains at least US$2 billion through diaspora remittances.

“Also, Hon. Sen. Muzenda made a proposal that perhaps we should think of taxing the diaspora. I think that is something to think about. Other countries do that, as long as someone maintains the citizenship of whether it is United States, wherever, the taxman follows you to say, we know you are Zimbabwean but you ought to pay your tax because you are a citizen over here too.

“The issue with us is slightly different. We receive about US$2 billion from diaspora in remittances. That goes directly to support families. It supports valuable and targeted form of aid. I am not so sure that we want to perhaps tax it. Even on IMTT, we remove the 2% tax, even for those remittances to say we appreciate that the money is coming here to support us. Besides, indirectly it ends up paying tax anyway, because if it is coming to ambuya somewhere in Gokwe, that ambuya will end up going somewhere to buy sugar, this and that. As they do that, they pay things like VAT. So, it ends up being netted into the tax bracket indirectly through the recipient on the ground. So, I do not think we want to go beyond that. I think we should be clear that the US$2 billion is coming in every year,” he said.

On the issue of teachers in Rwanda, the Minister said the educators were paying taxes to the source of their salaries, which is Rwanda.

“There are teachers that we sent to Rwanda, I understand that they are paying their taxes in Rwanda. I think they will only stop paying when we then have this avoidance of double taxation agreement, but I will also stand guided by my staff on such issues. My understanding was that they would pay at the source of their salary. The source of their salary is in Rwanda,” he said.