Banks are going to backdate the levying of the Intermediate Money Transfer Tax (IMTT) on foreign currency transactions that were done from 1 August 2020. IMTT, otherwise known as the 2% Tax, for forex transactions was announced in July but government had not started to collect the tax.
However, a recently gazetted Finance Act No.8 of 2020 advised that banks will be “deducting IMTT in retrospect, from all foreign currency transactions which qualify for IMTT with effect from 20 August 2020” according to NMB.
The tax-free threshold is for transactions of up to USD$5 whilst the maximum IMTT payable for forex transactions is USD$2000 for forex transactions exceeding USD$100 000.
It’s not the first time government has charged the 2% tax in retrospect. Just two weeks ago we saw EcoCash notifying its then Agents that government will start to collect tax on Agent to Agent transactions which were done l from 1 October 2018 to 1 June 20.