Money transfer agents warn of massive increase in transaction fees
By Taura Mangudhla
President Emmerson Mnangagwa’s recent imposition of a mandatory 4% Intermediate Money Transfer Tax (IMTT) on domestic foreign currency transfers could double transaction fees paid by customers, money transfer agents have warned .
The new measures are based on estimates that put the charges above the 10% mark for some of the officers. This means that a client will part with $10 on every $100 per transaction.
Officers said the trading public had already started panicking and pushing deals ahead of the actual increases that are now expected anytime soon.
The agents had become popular as banks suffered from an acute liquidity crisis that prevented depositors from withdrawing money.
“This decision goes against financial inclusion, how can you say you put 4% on transactions and claim you want financial inclusion? Pretty soon people will prefer to send their money on a bus, imagine if you have to lose $40 every time you send $1000 then it makes sense to drive if it’s close or just send a truck or a bus,” a senior official said. money transfer agent who asked not to be named for fear of being victimized.
“It’s not just about overcharging customers, it’s also about the risks it poses to our business,” said a bank executive who preferred to remain anonymous.
Currently, Mukuru charges 7%, with the rest, including Banc ABC’s City Hopper, charging between 3% and 5% of the amount sent. Perhaps the cheapest was Simbisa Brands’ Innbucks, which was shut down by the Reserve Bank of Zimbabwe on the grounds that it was unregistered. Other national agents include Access Forex and NBS InstaCash.
“The average Zimbabwean who sends money locally does so to supplement the income of relatives and relatives back home. Keeping the cost of personal remittances low is therefore important for the survival of many families.
“First of all, it puts more money in the pockets of those who send money to relatives inside the country. Second, it will increase flows through formal channels. Third, it will improve financial access for the most vulnerable segments of our society. High fees put a financial burden on senders and receivers of remittances, who receive a smaller amount of much-needed funds sent by family members,” said one of the agents.