{"id":1119,"date":"2025-05-09T07:51:20","date_gmt":"2025-05-09T07:51:20","guid":{"rendered":"https:\/\/tecazw.org\/?p=1119"},"modified":"2025-07-18T10:18:42","modified_gmt":"2025-07-18T10:18:42","slug":"how-much-of-your-1000-actually-reaches-the-economy-a-deep-dive-into-zimbabwes-transaction-taxes","status":"publish","type":"post","link":"https:\/\/tecazw.org\/?p=1119","title":{"rendered":"How Much of Your $1,000 Actually Reaches the Economy? A Deep Dive into Zimbabwe\u2019s Transaction Taxes"},"content":{"rendered":"\n


by Kuda Musasiwa (aka @begottensun)<\/strong><\/h2>\n\n\n\n

\u2e3b<\/p>\n\n\n\n

Let us break down what happens when $1,000 enters the Zimbabwean mobile money or bank system.<\/p>\n\n\n\n

We are looking at three  taxes, namely the 2% intermediated money transfer tax (IMTT), an applicable Ecocash or bank fee of 3 %, and a value-added tax of 15% on applicable goods.<\/p>\n\n\n\n

The first step is upon receiving money – when $1,000 hits your wallet, the 2% IMTT is immediately deducted.<\/p>\n\n\n\n

This means $20 is deducted and sent to the Zimbabwe Revenue Authority (ZIMRA) leaving a usable balance of $ 980.<\/p>\n\n\n\n

This tax is invisible to most, but it already trims your total.<\/p>\n\n\n\n

The next step is when you are using the money.<\/p>\n\n\n\n

Let us suppose you use the full $980 in 75 equal transactions with each transaction attracting the 2% IMTT tax and the 3% bank or Ecocash fee, making the total fees per payment 5%.<\/p>\n\n\n\n

This means only 95% of each payment reaches your supplier.<\/p>\n\n\n\n

So, the actual value reaching others is about $ 933.33.<\/p>\n\n\n\n

The third step is the tax you pay on spending.<\/p>\n\n\n\n

From the $ 933.33, the 2% IMTT on outflows amounts to $ 18.67 and the 3% on bank charges amounts to $28.00.<\/p>\n\n\n\n

This equals another $46.67 just for sending money during spending.<\/p>\n\n\n\n

The next step is to consider the VAT hidden in the price.<\/p>\n\n\n\n

Now,  let us suppose 50 of the 75 payments are for goods\/services that include 15% VAT.<\/p>\n\n\n\n

This means that $622.22 of your spending is VATable.<\/p>\n\n\n\n

Since prices already include VAT, we back-calculate it to find what percentage of the $622.22 went to VAT, which gives us $81.16<\/p>\n\n\n\n

This VAT never reaches your supplier\u2014it is collected for transmission to ZIMRA.<\/p>\n\n\n\n

Thus, the final summary of where your $1000 went shows that the portion collected by ZIMRA is $119.83, the amount going to Ecocash or bank charges is $28 and the actual amount one uses before VAT is $852.18.<\/p>\n\n\n\n

The conclusion is that out of your $1,000, only $852.17 reaches the economy (your pocket) as actual value.<\/p>\n\n\n\n

And $147.83 is absorbed by the system in taxes and transfer fees.<\/p>\n\n\n\n

Every swipe, transfer, and payment is taxed multiple times. Transaction costs add up fast.<\/p>\n\n\n\n

This is why cash deals are still king for many\u2014and why financial inclusion must come with cost reform.<\/p>\n\n\n\n

NOTE: This article has been edited for readability.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

by Kuda Musasiwa (aka @begottensun) \u2e3b Let us break down what happens when $1,000 enters the Zimbabwean mobile money or bank system. We are looking at three  taxes, namely the 2% intermediated money transfer tax (IMTT), an applicable Ecocash or bank fee of 3 %, and a value-added tax of 15% on applicable goods. The […]<\/p>\n","protected":false},"author":1,"featured_media":1121,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[6],"tags":[],"class_list":["post-1119","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-teca-blog"],"_links":{"self":[{"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/posts\/1119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tecazw.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1119"}],"version-history":[{"count":4,"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/posts\/1119\/revisions"}],"predecessor-version":[{"id":1133,"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/posts\/1119\/revisions\/1133"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tecazw.org\/index.php?rest_route=\/wp\/v2\/media\/1121"}],"wp:attachment":[{"href":"https:\/\/tecazw.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tecazw.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tecazw.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}