HomeAnalysis2% tax: Déjà vu

2% tax: Déjà vu

AS part of the top-down prescriptions that have visited adverse effects on the economic situation of ordinary Zimbabweans, Finance minister Mthuli Ncube promulgated a 2% tax in October last year on all electronic transactions.

Earnest Mudzengi

We may well forget about the pre-election promises for a new dispensation. This imposition of yet another tax package on an already heavily taxed citizenry points to the endurance of an exploitative economic system inherited from the colonial era.

As they entered what is now Zimbabwe, members of the Pioneer Column, the group that took the formative steps in Britain’s colonial encroachment into Zimbabwe, believed that the land between the Zambezi and the Limpopo was endowed with vast deposits of gold.

Realising that the gold was not as abundant as expected, the colonists immediately turned to other economic activities such as agriculture.

Apart from the massive expropriation of land belonging to the natives, taxation became a key part of the colonial economy that ensued.

Those schooled in Zimbabwean history may be aware of the hut tax, the land tax, head tax and other taxes that subjected the African majority to penury and economic servitude.

With the payment of taxes being demanded in cash, Africans were forced to seek cheap labour at emerging colonial farms and mines.

Herein lay the almost enduring culture in which Africans sought education for the purpose of being employed as opposed to creating employment.

This also became the foundation for a taxation regime in which ordinary poor people became the most heavily taxed while the colonial businesses and political elites were pampered in luxury.

This is mirrored in the post-independence economic system in which corporate tax is less burdensome compared to the numerous taxes to which ordinary citizens are subjected.

Where business elites have tax obligations, they simply pass the burden of these to ordinary citizens through skewed pricing structures.

There is the case of value-added tax that ordinary citizens have to contend with upon paying other mandatory obligations that include Pay As You Earn, the Aids levy, National Social Security Authority pension obligations, the Chinamasa-introduced airtime tax and other levies.

It is to this long list of tax obligations that government has added the 2% tax on all electronic transactions.

While electronic transactions have been touted as a new frontier for promoting financial inclusion, the 2% tax on all electronic transactions is a case in contrast. It is akin to the hut tax and other tax regimes of the colonial era that exposed those of the African race to the perils of financial exclusion.

The situation is worsened by the dearth of a culture of accountability among Zimbabwean politicians.

With a weak, opaque system of checks and balances that does not exert accountability, it is highly conceivable that proceeds from this 2% tax will largely go towards sustaining luxurious lifestyles of politicians.

Where politicians promised to address the economic plight of ordinary Zimbabweans during the election campaign period, politicians have moved on to have their unquenchable appetite for luxury being addressed by ordinary citizens who have to dig deeper into their pockets to meet demands of a burdensome tax system.

In proving beyond doubt that we are still under an economic system rooted in our colonial past, the 2% tax regime has come as part of the so-called transitional economic stabilisation programme that is wreaking havoc in the economy, with prices of basic commodities skyrocketing beyond the reach of ordinary people.

This programme has also come with another act of robbery in which the citizenry’s hard-earned cash has been metamorphosed into valueless RTGS dollars.

Under former Reserve Bank of Zimbabwe governor Gideon Gono, our money was “burnt” into bearer cheques and we were left with nothing.

Is this the new economic dispensation that was promised? Is this the Zimbabwe that is open for business?

Is this what the politicians promised when they campaigned?

The answer is certainly no.

It seems our case is a lethargic one of promises and lies.

I fondly remember Ian Smith (former Rhodesian Prime Minister), saying my Africans are the happiest in Africa.

He certainly must have inspired today’s lot of politicians who continue to thrive on hurtful economic policies without due consideration to citizens’ concerns and plights.

As was the case with colonial Rhodesia, we are in a sorry state of taxation without representation in which economic policy formulation is for subjects, not citizens.

In other countries, such heavy taxation comes with benefits such as free education, free health care and state-of-the-art infrastructure. Here, it is a case of being certified without being educated, more shortfalls, shortages and potholes.

We have yearned and continue to yearn for an economic system that frees us from segregationist, dictatorial and repressive colonial prescriptions.

Mudzengi is with the Media Centre in Harare. He can be contacted at: mudzengie@gmail.com. Appeared in Misa-Zimbabwe’s Thinking Beyond magazine.

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