Members of Parliament have warned that the recently introduced cash withdrawal tax will overburden formally employed citizens and potentially undermine efforts to formalise the economy.
Debating on the Finance Bill presented by Finance Minister Professor Mthuli Ncube, the legislators said the levy adds to a long list of existing bank charges and unfairly targets workers whose salaries pass through the formal banking system.
Budiriro constituency member of parliament, Darlington Chigumbu said the policy disproportionately affects civil servants and other formally employed people who need to withdraw cash to meet daily expenses.
“The people being paid through the banking sector are civil servants, yet they are already earning below the poverty line,” he said.
“This measure targets those who are formally participating in the economy, while those operating in cash are not affected.”
He argued that Treasury’s assertion that the levy would discourage cash usage, noting that Zimbabwe’s payment ecosystem does not provide viable alternatives.
Chigumbu pointed out that many businesses do not accept card payments or local currency, forcing consumers to withdraw cash.
“There is no framework compelling all players to accept swipe or electronic payments. A formally employed person has no option but to withdraw cash. The Bill should first address payment acceptance before penalising withdrawals,” he said.
MP for Norton, Richard Tsvangirai said the proposed withdrawal levy worsens the already excessive bank charges, making it costly for citizens to keep money in banks.
He listed debit card management fees, monthly account fees, IMTT, Zimswitch charges, withdrawal fees and balance inquiry charges as costs already borne by account holders.
“There is a resident who withdrew US$1 000 and was charged US$25 in bank fees, an additional two percent withdrawal levy would push the total cost to US$45,” said.
“That is just to access one’s own money. If we continue piling charges, we will push people out of the formal system and into the streets. This policy is counterproductive.”
Tsvangirai challenged Treasury’s claim that rapid withdrawals point to money laundering, saying the real reason people withdraw cash is the high cost of banking.
He also reminded the House that the ruling party had previously resolved to remove the IMTT, questioning why Treasury was introducing another levy instead.
“If you compare our charges with neighbouring countries, ours are much higher. That is why Zimbabweans are opening bank accounts in South Africa. We need to remove this tax,” he said.
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