Judgment Reserved in Activist’s Challenge of Govt’s Punitive Tax

Judgment Reserved in Activist’s Challenge of Govt’s Punitive Tax

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HIGH Court Judge Justice Happias Zhou on Tuesday 12 February 2019 reserved judgment on an application filed by human rights activist Mfundo Mlilo challenging the imposition of a punitive tax on electronic transactions by Finance and Economic Development Minister Mthuli Ncube as illegal and unconstitutional.

Justice Zhou reserved judgment after hearing submissions from Mlilo’s lawyer Tendai Biti of Zimbabwe Lawyers for Human Rights and from Ncube’s lawyer only identified as F. Chigwere.

In court, Biti argued that government’s decision to hike the Intermediated Money Transfer Tax, which is the tax levied on electronic money transfers, to two cents per dollar transferred from five cents per transaction, was made by Ncube without the necessary backing of the law in particular the amendment of the income tax or the regulation of the tax in a statutory instrument.

Biti argued that Ncube’s imposition of the punitive tax is illegal and unconstitutional as he had usurped Parliament’s powers by pretending to amend a law and promulgating a fresh law, which is too wide and in contravention of the Constitution.

The human rights lawyer contented that although Ncube had on Friday 12 October 2018 belatedly enacted the Finance (Rate and Incidence of Intermediated Monetary Transfer Tax) Regulation Statutory Instrument (SI205/2018) in which he sought to legalise and actualise his announcement done on 1 October 2018, the statutory instrument still remained unconstitutional and a nullity for a Minister cannot in regulations amend an Act of Parliament.

Biti wants the High Court to suspend the decision taken by Ncube on 1 October 2018 to review the Intermediated Money Transfer Tax from 5 cents per transaction to 2 cents per dollar and to also forthwith
suspend the Finance (Rate and Incidence of Intermediated Money Transfer Tax) Regulations published in SI205/2018.

On the other hand, Chigwere defended the imposition of the intermediated money transfer tax, which critics blame for triggering the increase in prices of basic commodities in the country.

 

ENDS

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