FINANCE minister Mthuli Ncube announced gleefully this week that government has been recording fiscal surpluses of an average $100 million a month since September last year. What he did not say was that it was coming from robbing every Zimbabwean irrespective of their income, as long as one is transacting electronically above $10.
Candid Comment,Faith Zaba
The government is bragging about the surpluses it raised through indirect taxes being levied on long-suffering Zimbabweans through the Intermediated Money Transfer Tax, referred to as the 2% tax.
Whoever came up with the idea to levy the 2% on electronic transactions above $10 is a wicked genius. Adding up the figures based on Ncube’s statement in Bulawayo, government could have made a surplus of around $1,2 billion between December and March.
Already bearing the brunt of high taxes, ordinary Zimbabweans also have to contend with the skyrocketing prices of basic commodities. To add to the woes of the overtaxed citizen are the recent increases in fuel prices, funeral assurance by over 100% and medical aid cover by between 70% and 100% in three months as well as a hike in mobile network tariffs.
In addition, prices of basic commodities have gone up by more than 200% in the last seven months.
To make matters worse, the salary earned by most formally employed workers, who constitute just 5% of the economically active population, is in local currency and it has been heavily eroded, particularly after government separated forex and RTGS accounts in October last year.
Just to illustrate how ruthless the government is, a worker has to pay income tax (pay as you earn, PAYE) at a rate ranging between 20% for the lowest paid employee earning a monthly salary of above $350 and 45% for the highest paid getting over $20 000.
The worker also has to pay the mandatory 3,5% pension contribution to the National Social Security Authority (Nssa) and an Aids levy of 3% of the PAYE.
Pensioners currently receiving an average $100 a month from government have not been spared from the 2% tax in addition to fees charged by banks and mobile money transfer agents. Even children below 18, who receive pocket money electronically from their parents, also have to pay the 2% plus other charges. The government has cornered its citizens, who, because of the cash shortages, have to make all their transactions electronically. Zimbabweans are under a tax siege from the government.
To buy basic goods like 2 litres cooking oil, 5kg maize meal, 2kg washing powder and 1kg beef, people are charged 2% as these items now cost more than $10.
The 2% tax, suffocating ordinary people, is inflationary. It is increasing the cost of business which, in turn, passes the burden to the poor by pushing up the prices. The tax is further impoverishing poor people, who are the majority of the population of 16 million people. There is now a general sense of hopelessness in the country.
Zimbabweans have lost savings and pensions for the second in just over a decade. All this is as a result of toxic policies and misrule by their own government. If the government is as pro-people as it claims, it should just scrap the catch-all 2% tax.