ACCOUNTING FOR THE 2% IMT TAX

Towards the end of the 2018 calendar year, the Finance Minister – Professor Mthuli Ncube – announced a 2% Intermediated Money Transfer Tax (IMTT) as part of the austerity measures introduced by the government. In this free guide, we discuss the financial reporting implication of the guide. Click below to get the free guide.


About the Author

Training & Advisory Service (TAS) is a member of Chartered Accountants Academy (CAA). TAS/CAA philosophy is to integrate classroom knowledge and industry practice for education to remain relevant. TAS is the gateway of CAA to the market place where classroom knowledge is integrated with industry practice. This paper is a product of many others from the TAS/CAA Technical Think Tank. This is a contribution of Anesu Daka CA(SA)(Z), Zvinotendesa Mapetere CA(Z), Ackson Mapfundematsva, Philip Chambati and Leonard Mapenda.

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About the Author : Ackson Mapfundematsva

Ackson is an aspiring Chartered Accountant who holds a BSc in Accounting and a Certificate of Theory in Accounting. He is currently at the final hurdle to qualifying as a Chartered Accountant, which is the Assessment of Professional Competence (APC) or Board II. His areas of expertise are International Financial Reporting Standards (IFRS), and International Public Sector Accounting Standards (IPSAS). You can reach Ackson on email: ackson@caa.ac.zw or connect with him on LinkedIn https://www.linkedin.com/in/ackson-mapfundematsva-ba762937

5 Comments
  1. simba mandonye February 15, 2019 at 18:18 - Reply

    A really informative & good read!!

  2. Tari Murambinda March 18, 2019 at 19:17 - Reply

    …. insightful approach to cover all types of assets, thank you… I noted that the article delves more into initial recognition of the IMTT, are there are considerations to look at on subsequent measurement of the assets after capitalizing the tax e.g. inventory?

  3. CAA Student (CTA) Level 2 March 20, 2019 at 11:44 - Reply

    Very informative! However I have a different view on concluding that IMTT is a cost directly incurred in bringing the goods to their present location and condition, my view is that these are costs simply incurred to facilitate payments for those goods. The IMTT is not paid directly to any supplier of the goods or anyone who provide a service directly linked with bringing the goods to their present location and condition. Lets consider a situation where the goods are acquired on credit with the IMTT paid after year end, does this now create an obligation to ZIMRA and consequently recording a liability since we would have capitalized the IMTT to the asset. Lets also consider the treatment of this IMTT in prior year when it was 5c per transaction, is it a matter of principle or materiality which has changed. My view is on expensing the IMTT regardless of what is being paid for…

  4. Raymond A. Mukosi March 20, 2019 at 18:59 - Reply

    Hi Ackson. Beautifully crafted article! I share the same view with you regarding this treatment and I have been trying to convince a number of people that this is the most logical school of thought but what we are seeing in the industry is that many clients are simply disclosing it as bank charges. However, I have a bit of a question there Ackson. Considering that the bulk of the market transactions happen on a credit basis, are you allowed to capitalize the 2% cost on the acquisition of an asset before you have actually paid for that asset (and hence, before you have actually incurred the 2% charge). If so, how would the journal look like? It seems such journal will create some sort of 2% liability (perhaps a provision), the existence of which may not have an IAS 37 supportable basis. A school of thought in the industry which holds a dissenting view says that the IMTT is actually a tax arising on the settlement of the consideration of a transaction rather than a tax that arises as a direct result of the transaction itself (and hence not a transactional tax). That the other view, whats your take on this?

  5. David Mautsa March 21, 2019 at 10:19 - Reply

    Good job guys, very informative, practical, understandable and helpful. Keep it up

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