CAPTAINS of industry and commerce yesterday asked Treasury to scrap or lower the controversial 2% intermediated money transfer tax (IMTT) imposed last year by Finance minister Mthuli Ncube, saying it was an unsustainable additional cost to their already struggling companies.
The call came as various bodies representing industry and commerce appeared before the Felix Mhona-chaired Budget and Finance Portfolio Committee as part of the 2020 budget consultations.
The industrialists also urged government to stop funding the Command Agriculture programme because it was fuelling broad money supply and driving the economy into hyperinflation.
The US$2,8 billion that government used to support Command Agriculture has since been deemed as unauthorised expenditure after it was allocated without Parliament approval.
Ncube is yet to come before Parliament for condonation.
Command Agriculture has all along been supported by government through issuance of Treasury Bills (TBs), which is basically printing of money that government does not have.
Between 2017 and 2018, around US$2,8 billion was issued to Sakunda Holdings, owned by Kudakwashe Tagwirei to spearhead the Command Agriculture programme.
“The impact of the Command Agriculture programme has been to crowd out activities in the market, and we think that the Presidential Input Scheme should be the one funded through the budget,” Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer Christopher Mugaga said.
“Command Agriculture should be a specialised activity funded by banks. It is non-performing loans and at the end government incurred an expenditure and so Command Agriculture must not be on the budget figures,” Mugaga said.
Turning to the 2% tax, Mugaga said it has been a serious expenditure and so Command Agriculture must not be on the budget figures,” Mugaga said.
Turning to the 2% tax, Mugaga said it has been a serious cost to business.
“Running a budget surplus on the 2% transaction tax has always been high for us as business and we need to engage Zimra (Zimbabwe Revenue Authority) and the Finance ministry so that they either remove it or reduce it to 1% because of its cost to business. If I send money to my mother today, it is taxed and it is too much. The 2% (tax) is a major cost to business and you cannot celebrate a budget surplus driven by this when business is being lost through it and there is no cost benefit to it,” Mugaga said.