- March 13, 2025
- Posted by: admin_IT
- Categories:
Intermediary Money Transfer Tax (IMTT) is a levy on electronic financial transactions, which was introduced by the Government in 2018, through Statutory Instrument (SI) 205 of 2018. Since then, the tax has been adjusted several times to balance revenue generation with the need to address economic dynamics and stakeholder concerns.
Currently, the IMTT rate is 2% for transactions in local currency and 1% for USD transactions, and this was effected through Section 4 of the Finance Act Number 13 of 2023. However, for single transactions equivalent to or exceeding US$500,000, a flat IMTT of US$10,150 is applied, providing a ceiling to the tax burden on substantial transfers.
It is important to note that most countries that have implemented taxes on electronic money transfers, have a large informal sector and a large unbanked population. To this end, the tax is meant to tap into the informal sector, so that they contribute to Government revenues.
Regional Benchmarking of Intermediated Money Transfer Tax
Several countries, particularly in Africa, have implemented taxes on mobile money transactions and these vary in structure and rate. On the other hand, developed countries have not implemented specific transaction taxes on mobile money services akin to those seen in some developing nations.
However, developed countries have introduced regulatory measures and reporting requirements to monitor and manage digital financial transactions. A comparison of IMTT with other countries in the region shows that Zimbabwean rates of 2% for transactions done in local currency is higher than those charged in the region ….
