By Dennis Ndlovu| Zim GBC News
In a heated parliamentary session on Tuesday, Zimbabwe’s lawmakers debated the 2025 Finance Bill, with a strong focus on tax adjustments aimed at increasing government revenue while promoting the use of the local currency, the ZiG.
Finance Minister Prof. Mthuli Ncube defended several key proposals, including a reduction in the Intermediated Money Transfer Tax (IMTT) on ZiG transactions from 2% to 1.5%, while keeping the IMTT on US dollar transactions at 2%.
He explained that the move is designed to discriminate in favour of the ZiG and encourage its adoption.
“We want to shift the preference towards the domestic currency,” Ncube stated.
However, this differential treatment faced pushback from several MPs.
Hon. Edwin Mushoriwa argued for uniformity, stating,
“We need to make sure that there is a uniform taxation system1.5% to US, 1.5% to ZiG.”
He warned that maintaining a higher rate on USD transactions unfairly burdens the poor and those in the informal sector who primarily use foreign currency.
The debate also covered a proposed 0.5% increase in Value Added Tax (VAT), from 15% to 15.5%, which the Minister framed as a compensatory measure for the reduced IMTT on ZiG.
Critics, including Hon. Maureen Kademaunga, highlighted the impact on low-income earners
“Most low-income-earning families use 60% of their income on household goods that are going to be affected by this 15.5%,” she said.
Another contentious issue was the introduction of a presumptive rental income tax of 25% on property owners, which was later revised down to 15% following protests from MPs.
Hon. Nelson Tsvangirai argued that the tax contradicts the Government policy for providing affordable housing and would ultimately be passed on to tenants.
Minister Ncube acknowledged the concerns and agreed to reduce the rate, but emphasized the need for compliance.
“If a property owner does not reside in your property but you elect to have tenants and make money out of it, you are not a poor individual, ” he said.
He also announced the removal of a proposed cash withdrawal levy after widespread criticism that it would discourage banking.
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