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I’ve tried to seek the advice of numerous specialists on this tax measure introduced within the 2025 finances, which takes impact in January 2025. Most of them appear confused about what it precisely means. The questions paused are twofold:

1. Is this a income mobilisation measure?
2. ⁠Is it to curb illicit flows in another country as a result of FIC report of $3 billion uncovered remittences?

Firstly, it’s unclear whether or not this can be a blanket tax on all remittances leaving the nation, regardless, or is it for chosen transaction sorts.

Addressing 1, above, we will low cost that it’s not a income mobilisation measure as a result of we perceive that it’s refundable or exempted when you’ve got a tax clearance certificates.

Addressing 2 is a fancy concern. Why would you introduce a tax to curb illicit transactions as a result of that’s against the law? FIC has precise particulars of which transactions they’re reporting and who’s accountable? So why not simply prosecute the perpetrators of such transactions as a substitute of inconveniencing harmless residents?

If we flip this round, are we then saying that illicit transactions might be permitted so long as you pay 15% tax? Would folks concerned in cash laundering trouble to pay 15% tax to cleanse their illegitimate cash? The reply is that it’s music to their ears.

So the large query is, what’s the rationale behind this coverage measure?

Let’s discover this additional, what might be outlined as remittences above $2,000?

If I journey outdoors the nation and use my Kwacha debit or bank card, will my bills paid outdoors Zambia be deemed as remittences? I say so as a result of the settlement for my overseas bills paid utilizing my Kwacha card should be settled in $ by my Zambian financial institution, which issued the cardboard.

If I pay faculty charges for my son or daughter abroad, then do I’ve to pay 15% tax?

What if I buy items utilizing on-line platforms utilizing my Kwacha debit or bank card exceeding $2,000? Will that be deemed as remittences, or is it solely direct financial institution to financial institution transfers that might be deemed as remittences? Currently, BoZ units $5,000 for Bureaux and $10,000 for business banks as every day limits for buying {dollars}. Note that these are every day limits.

Now, we’re introducing one other restrict at one other stage. Why not synchronise these limits to avert creating confusion.

Is this coverage not going to create an off-the-cuff worldwide cost system? I say so as a result of I can withdraw $10,000 from a business financial institution and ship offshore utilizing people? Are we conscious that the most important cash transmission channel for our cross-border transactions is truck and bus drivers?

Another skilled commented that would the current sharp rise of the Kwacha charge at K27.56 per $ be on account of this coverage announcement? Could these with extra Kwacha balances be externalising cash now to keep away from this tax, which comes into impact in January 2025, thereby placing stress on the greenback demand facet?

All in all can the MoF present a complete steerage on how this tax measure will work moderately than creating anxiousness and hypothesis available in the market.

Fred M’membe