HARARE – The Government of Zimbabwe’s decision to introduce an intermediated money transfer tax (IMTT) on cash withdrawals has drawn warnings from economists and policy analysts, who say the measure risks undermining already-fragile public confidence in the banking system. The move forms part of a broader overhaul of the tax, which also includes lowering the ZiG-denominated IMTT rate from 2% to 1.5% and maintaining the 2% levy on foreign currency transactions. Analysts say the introduction of a withdrawal tax could have significant unintended consequences, particularly in an economy where banking confidence remains low and cash circulation is often preferred over electronic payments.
Renowned economist Professor Gift Mugano warned that the withdrawal levy would discourage depositors from banking money, undermining liquidity within the formal financial system. “People will not bank money. If they don’t bank the money, how will your retailers get credit?” Mugano said, adding that the new charge could push more economic activity into informal cash-based markets.
“How is the budget progressive when Treasury increases VAT and maintains IMTT – this will be passed on to customers at higher prices. “This will militate against sustainability of the retail sector-the general public will choose Tuckshops ahead of formal shops because your formal shops will be expensive,” he said. Zimbabwe’s lost moment of economic sanity: Why the Biti…Dec 2, 202531,216Zimbabwe Govt buys Monomotapa Crowne Plaza Hotel in Harare…Nov 5, 202531,134Ministers clash in Parliament over PSMAS funding delays,…Jul 25, 202527,442You can’t rig prosperity, Prof. Ncube – Zimbabweans are…Jul 13, 202517,552 Zimbabwe’s lost moment of economic sanity: Why the Biti…Dec 2, 202531,216 Zimbabwe’s lost moment of economic sanity: Why the Biti… Zimbabwe Govt buys Monomotapa Crowne Plaza Hotel in Harare…Nov 5, 202531,134
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