ZCTU says 2% tax protest goes ahead; finance minister’s review ‘meaningless’

ZCTU President Peter Mutasa

THE Zimbabwe Congress of Trade Unions (ZCTU) has vowed to go ahead with a demonstration against Finance Minister Mthuli Ncube’s 2-cents-per-dollar tax after, dismissing a review announced Friday as “meaningless”.

Prof Ncube sparked widespread outrage after imposing a two percent tax on electronic money transfers in a bid to raise money for the cash-strapped government.

Giving in to the criticism, the minister reviewed the tax on Friday, capping it at $10,000 while transactions below $10 would be exempt.

“The 2 cents per dollar tax will apply will apply on transactions of $10 and above only,” the minister said.

“Transactions below $10 will be exempt from this tax. There is a cap of $10,000 on the amount to be paid. This implies that transactions above $500,000 will attract a flat tax of $10,000.

However, speaking to NewZimbabwe.com Saturday morning, ZCTU president Peter Mutasa said that the labour federation had resolved to go ahead with their demonstration which is slated for this Thursday.

“Nothing has changed, but nothing turns on the purported changes and clarifications,” said Mutasa.

“In fact, the changes simply show that the minister was attempting to placate the rich and ignore the poor.

“He still wants to charge the additional taxes on school fees transfers in addition to Pay as You Earn tax and the gazetted minimum of $10 is a big joke considering the current price increases.”

Mutasa said, in any case, the business community will just pass down the extra costs to the ordinary consumers by adjusting.

“… in addition, the tax will cause some companies that are already facing viability challenges to fold, thereby frustrating attempts to revive exports and the easiest way such businesses immediately respond to the developments is through job cuts.”

The ZCTU boss warned that demonstrations will continue until the government scraps the tax measure.

“A responsible government gives an ear to its people through consultation before embarrassing itself as witnessed by the minister who initiates a policy and amends it in less than a week,” said Mutasa.

“Besides, the constitution prescribes participatory democracy which has been lacking since independence and, contrary to the New Dispensation’s promises, Zimbabweans today find themselves in same top-down approach typical of the Mugabe era.”

Legal watchdog, Veritas, has also hinted that the tax directive could be illegal since  it was implemented before a notice was issued in the Government Gazette as required under the country’s Finance Act.