BREAKING: Govt adjusts 2% tax, exempts some business transfers and low value transactions

Finance Minister Mthuli Ncube

Finance Minister Mthuli Ncube has adjusted his electronic transactions tax to exempt transfers below $10 and some business transactions.

On Monday, Ncube introduced a tax of 2 cents per dollar on electronic payments, which now make up as much as 99% of all transactions in the country.

Following an outcry, Ncube issued a statement late on Friday, exempting transactions below $10 from the tax, while payments above $500,000 will attract a flat $10,000 tax.

Also exempt are the following transactions:

  • Intra-company transfers of funds, including transfers from intermediary accounts
  • Transfer of funds on purchase and sale of equities
  • Transfer of funds on purchase and redemption of money market instruments
  • Transfer of funds for payment of salaries
  • Transfer of funds to intermediary accounts, for example, conveyancers;
  • Transfer of funds in respect of foreign currency related payments; and
  • Transfer of funds by Government