High Court nullifies the controversial 2% tax

Harare – The High Court has in a landmark ruling set aside SI 205 of 2018 on the 2% tax for all electronic transactions which was initially introduced for transactions above RTGS$10 by the Finance Minister Professor Mthuli Ncube in October last year.

The minimum threshold was later revised to transactions above RTGS$20 following the 2019 mid-term budget review.

According to the information shared by the Zimbabwe Lawyers for Human Rights, High Court Judge Justice Zhou oversaw the ruling and the case was being argued by Advocate Tendai Biti who also serves as the MDC Alliance vice president and is the Parliamentary Public Accounts Committee Chairman.

Advocate Biti was representing Mfundo Mlilo a director of the Combined Harare Residents’ Association who was arguing that Zimbabwe’s Constitution does not allow the government to repeal sections of an Act of Parliament without being debated and passed by the National Assembly.

The 2% tax had become a major source of revenue for government while it remained largely burdensome for the general public as it instigated further erosion of real incomes in addition to skyrocketing inflation.

Earlier in February, Professor Ncube said that government was collecting close to $80 million every month through the 2% tax.

He said the money would go a long way in supporting the social infrastructure and social services.

“We have said what we are targeting is education, health services and devolution – the cost of devolution is $310 million,” Ncube is on record saying.

No official response has yet been received from government and or from the Treasury in response to the latest ruling, but it is highly likely that a court will be put in place.

Equity Axis News

Raynold Mhotseka

Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, rayjnr.mhotseka@gmail.com and raynoldm@equityaxis.net.

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