MPs want CDF exempted from IMTT tax

MPs want CDF exempted from IMTT tax
MPs want CDF exempted from IMTT tax

MPs want CDF exempted from IMTT tax

Mberengwa North legislator Marko Raidza has called on Finance Minister Mthuli Ncube to consider exempting Constituency Development Fund (CDF) from paying the Intermediary Money Transaction Tax (IMTT).

IMTT is a tax that is charged on electronic money transfers in Zimbabwe.

The tax has generally been criticised for putting pressure on the citizens who have been forced to use electronic money due to unavailable of enough cash in the system.

However, legislators feel the tax is weighing down on what the CDF money can do, as it is being affected by the tax.

The legislators are in agreement that CDF should be exempted if the money is to be useful.

Speaking during the Second Reading of the Finance Bill in the National Assembly, Honourable Raidza pleaded with the government.

‘’I want to take this opportunity to add my voice to the Bill that is presented by our Minister of Finance.  I have some few issues to comment on. The first issue that I want to comment on is on the IMTT tax regarding the CDF that we are getting.

‘’Whenever we will be buying outside there, a lot of money ends up going to this tax and in the process the citizens who are supposed to benefit from the projects that we are supposed to undertake with these funds, we end up losing out on the tax.

‘’ So I wanted to propose to the Minister that out of his wisdom, if it is possible to exempt this fund from tax because that money comes from tax and it is being taken again through tax. At the end of the day we go round in circles and we will not achieve what we have planned as Government to achieve in terms of bringing development and services to the people.

‘’The other issue that I also want to talk about is regarding the issue of general taxation in this country. If we look at it closely we will realise that the few people who are not dodging from paying tax are the ones you are continuing to overtax. My proposal to the Minister is that we need to find other means to widen our tax base and make sure that everyone pays tax. 

‘’This tax money is the one that brings roads, clinics and social services to the people.  So, when someone is dodging from paying tax and at the same time claim the services, where do you expect the services to come from?  I think in this country we have a lot of tax dodgers in the sense that we have other people who end up being even richer than the country yet if we look at their tax returns or tax obligations we end up being surprised that they are not paying tax at all.  How then do these people get away with murder? 

‘’So I am proposing to our Minister to look at the best way to bring everyone into the net, whether rich or poor, so that at the end of the day we all enjoy the benefit of the tax in this country.  Let me give you an example for the benefit of the Minister.  We have other people in this country who are doing business outside the banking system.

‘’If, for instance you go downtown, those foreigners who are busy doing business demanding foreign currency and cash for all the transactions and the good idea that the Minister came with, of IMTT we will not catch up with them.

‘’So how best can we make sure that these people also get involved in paying tax because they enjoy the services of this country yet they do not contribute anything? We understand that in other jurisdictions you cannot have money either in your account or at your home that has not paid tax in one way or the other.

‘’Many of us have money in our pillowcases that never paid tax.  Hon. Minister, my submission is that you need to really look into these issues and make sure that everyone is contributing what is due to this country.  At the end of the day we will not have too many taxes,’’ he said.

ZW$200K CDF lost to IMTT

Honourable Raidza’s proposal was supported by Hwange East legislator Wesley Tose Sansole who revealed that he lost about ZW$200 000 of his CDF to IMTT.

‘’On IMTT, I want to support the scraping of this tax on CDF because of the fact that VAT will have been paid already and it reduces the amount that we can allocate to our projects. ‘’All of us I think spent well over ZWL $200 000 on IMTT from our CDF allocation, which is quite a sizeable amount to take from CDF,’’ he said.