Mthuli Ncube reviews tax-free threshold for 2 Tax

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Finance Minister Minister Mthuli Ncube yesterday announced that government has reviewed the tax-free threshold for the 2% Tax. The 2% Tax also known as Intermediated Money Transfer Tax (IMTT) is charged on processed electronic transactions.

The tax has continuously been reviewed at every Budget Statement Presentation to reflect new economic realities. Government has decided to increase the tax-free threshold from ZWL$300 to ZWL$500 whereas the tax-free threshold for US dollar transactions remain pegged at US$5.

Mr Speaker Sir, Intermediated Money Transfer Tax (IMTT) has, over the past years, generated substantial resources that have enabled Government to support various infrastructure projects, including responding to the COVID 19 pandemic. Notwithstanding this thrust, there is need to review the value of non-taxable transactions, in order to cushion low income earners and high volume businesses, in line with macroeconomic developments. I, therefore, propose to review the Tax-Free Threshold from the current ZWL$300 to ZWL$500 and the maximum tax payable per transaction by corporates from the current ZWL$25 000 to ZWL$800 000 on transactions with values exceeding ZWL$40 million, with effect from 1 January 2021. For transactions in foreign currency, the Tax-Free Threshold remains at
US$5.

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