Zim’s two per cent tax still illegal despite gazetting of Statutory Instrument 205

ZwNews Chief Correspondent

Zimbabwe’s highly condemned 2 per cent tax which took effect on 13 October 2018, the day after the gazetting of Statutory Instrument 205 (SI 205 of 2018), on 12 October, based on section 3 of the Finance Act as the enabling Act of Parliament, is still unconstitutional.

The government of Zimbabwe gazetted SI 205, of 2018, in an attempt to give legal effect to the review of the Intermediated Money Transfer Tax announced by Minister of Finance and Economic Development, Mthuli Ncube.

In his fiscal measures statement, on 1 October 2018, Ncube announced 2 per cent on each dollar spent through electronic payment system, which he said was to be operational immediately.

“I am therefore directing financial institutions, banks, and the Zimbabwe Revenue Authority, working together with telecommunications companies to extend the collection to all electronic transactions,” he said.

The 2 per cent eventually took effect on 13 October 2018, after the SI 205.

However, according to a constitutional watchdog, VERITAS Zimbabwe, the tax and the SI 205 are still both illegal, as had not been confirmed by parliament, whose; both houses the lower and the upper are in recess until Tuesday 30 October 2018.

“Any SI made in terms of section 3 (2) of the Finance Act falls away unless confirmed by Parliament in accordance with the following timeframe; bill for the confirming Act must 1) pass second reading within the next 28 days, on which parliament sits next after 13 October and 2) become law as an Act within six months of that second reading.