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In a major policy change during a marathon parliamentary session that concluded in the early hours of Wednesday, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, announced the wholesale repeal of the proposed foreign currency cash withdrawal levy.
The reversal followed intense lobbying from lawmakers and the public, who warned that the new taxes would “strangle” ordinary citizens and drive the economy further into informality.
The Finance Bill had initially proposed a tiered levy on foreign currency withdrawals, a move the Treasury defended as a measure to curb money laundering and promote electronic transactions.
However, the proposal met with fierce resistance in the National Assembly, where MPs argued it would unfairly penalise civil servants and low-income earners who rely on cash for daily transactions.
“I have listened to the argument. Treasury has been listening,” Prof Ncube told the House.
He acknowledged that the proposed levy risked becoming a “big penalty” that would discourage citizens from depositing money into the formal banking system in the first place.
Consequently, the Minister moved to repeal Clause 7 in its entirety, effectively scrapping the planned withdrawal tax.
“I have listened closely to the debate from Honourable Members and the public regarding the cash withdrawal levy proposals. Therefore, I hereby propose that we repeal that whole Clause 7. I thank you,” said Prof Ncube.
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