Econet complies with Govt tax policy

Published: 16 January 2014

Econet has started levying the intermediated money transfer tax on customers for mobile money transfer service in line with the Government's directive.

Presenting the 2014 national budget last month, Finance and Economic Development Minister Patrick Chinamasa proposed to levy an intermediated money tax of $0,05 per transaction on every transfer of funds made using mobile money transfer service.

He said this was effective from January 1, 2014. At present, Econet and NetOne run mobile money transfer service called EcoCash and OneWallet respectively. "We advise that a transaction tax of 5 cents will be levied on applicable transactions effective January 1, 2014 in line with Government tax policy," said Econet.

The mobile service operator would be obliged to withhold the intermediated money transfer tax. Efforts to get a comment from NetOne spokesperson Rutendo Chabururuka were futile as he did not respond to written questions from Chronicle. Minister Chinamasa said the intermediated money tax of five cents per transaction was meant to level the playing field.

"Notwithstanding the positive impact of mobile banking services on the welfare of the then financially excluded members of our society, this product should, however, conform to the tax principle of fairness, hence, the current tax on similar products such as automated teller machines (ATM) and Point of Sale should apply."

On every occasion that a bank client withdraws cash from his or her account using ATM, the financial institution deducts an automated financial transaction tax of $0,05 on each transaction.

"The automated financial transaction tax, thus, applies on transfer of funds from a financial institution to a mobile platform."

He said the emergence of mobile technology had opened doors for innovation facilitating the transfer of funds through mobile phones.

"This new phenomenon has provided greater flexibility and financial inclusivity to the majority of the population in remote areas where banking services are not available," said Minister Chinamasa.

- Chronicle.

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