Those of us who make it a habit to study their bank statements carefully every week know that the government levies 5 cents on each and every electronic transaction that you make. We mean every transaction.
For relatively high value transaction like a $10 purchase at a supermarket that seems like nothing. Paying 5 cents to the government every time you transfer $100 to your landlord’s account makes the 5 cents immaterial in the grand scheme of things.
Not so for microtransactions
Microtransactions are transactions that involve small amounts of money. Things like you buying fresh vegetables for 20 cents at the nearest fruits and veggies stall. Paying 50 cents for your Kombie fare. Buying a sandwich for lunch. In this cases 5 cents constitutes as much as 25% of the transaction.
That might not seem like a lot but if you were to make say 100 $0.20 transactions you will end up paying $5 in taxes for a $20 puchase in transaction taxes. That’s a lot of tax.
Government heeds the call
Deputy Minister @tmukupe in response to @DrMambondiani's request to remove the 5c Govt tax, says he will work on it and discuss it with his Minister and Principals. #Kwenga #iTakeSwipe pic.twitter.com/6FfOipDf1u
— Ruvheneko (@RuvhenekoP) January 25, 2018
During the launch of the Kwenga POS machines by Deputy Finance Minister Mukupe was quizzed about this tax and how it was going to defeat the Steward Bank initiative where they were going to offer all transactions under $1 for free.
A few hours later the Ministry announced that they had scrapped the tax for all transactions under $10. Now that is a big deal as it will further help with the cash crisis by making cash less and less relevant.