Landmark ruling as Biti topples Mthuli Ncube’s tax

 Landmark ruling as Biti topples Mthuli Ncube’s tax

Parliament’s Public Accounts Committee chairperson Tendai Biti

By Hope Sarara

OPPOSITION MDC deputy president and former Finance Minister Tendai Biti on Wednesday successfully argued for the scrapping of the controversial two percent transactions tax introduced last year.

The introduction of the tax under the Transitional Stabilisation Programme caused an uproar and pushed prices of basic commodities and consequently inflation beyond the reach of many.
Pro-democracy activist Mfundo Mlilo represented by Biti then brought an application before the High Court seeking to reverse the introduction.
After months of waiting High Court Judge Justice Happius Zhou yesterday ruled in Mlilo’s favour.
However Biti immediately admitted the ruling could be academic.
“They (government) were clever because they had also inserted the new tax into the Finance Act. But they did not repeal Statutory Instrument (SI)205/2018 also known as the Finance (Rate and Incidence of Intermediated Money Transfer Tax) Regulations,” Biti said in an interview with
“What this means us that the tax will remain in place until the Finance Act is repealed. We will study the judgment and as lawyers move on from there.”
Biti added: “The Act will be their defence to say this was included in the Finance Act.”
In his application, Mlilo said Ncube’s decision was made without the necessary backing of the law, specifically the amendment of the Income Tax Act or the regulation of the tax in a Statutory Instrument hence it was illegal and unconstitutional.
Mlilo also accused Ncube of usurping the powers of Parliament by pretending to amend a law and promulgating a fresh law, which is too wide and in contravention of the Constitution. This he said no Minister has power to do.
According to the application the Treasury chief also had on October 12, 2018 belatedly enacted the Finance (Rate and Incidence of Intermediated Monetary Transfer Tax) Regulations Statutory Instrument (SI205/2018), in a desperate bid to clothe his tax in some legality.
But this he said could not remove the SI’s illegality and thus the law as well as the tax remained a nullity.


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