The government recently increased the intermediary financial transactions tax from USD0.05 per transaction ta USD0.02 per every dollar transacted. This article tries to analyse the impact of the new financial transaction tax on consumption (that is, demand and supply). What is the 2% intennediary financial transactions tax?
Statutory instrument 205 of 2018 states that the intermediary money transfer tax chargeable in terms of section 36G of the Taxes Act shall be calculated at the rate of USD0.02 on every dollar transacted for each transaction. Transactions include Real Time Gross Settlement (RTGS) payments, telegraphic payments, mobile money transfers and payments through Ecocosh, Telecosh, One Wallet etc., mobile banking payments and transfers, point of sole (POS) transactions etc.