Policy Contradictions and Policy Dilemma: A Case of Intermediary Money Transfer Tax (IMTT) on Business Performance in the Engineering Sector in Zimbabwe

The use of tax policies to address macro-economic challenges has often led to serious other macro-economic challenges for developing countries. The purpose of this paper is to illustrate macro-economic policy dilemmas that affect developing countries when they implement tax policies to address macroeconomic challenges. The objective of the study was to examine how the 2% Intermediary Money Transfer Tax (MTT) introduced to raise financial resources to grow the economy affected performance of companies in the engineering sector. The study was guided by the pragmatism research philosophy, used explanatory research design and a mixed research approach. Data was collected from companies in the metal fabrication and machine/equipment sub-sectors of the engineering sector. A total of 68 companies were used. The paper shows that a tax policy adopted by Zimbabwe to raise revenues for supporting economic growth and addressing several economic challenges such as poverty, unemployment and negative economic growth generated other macro-economic challenges such as declining performance of companies in the Engineering sector. Results from the study showed that 2% IMTT had a negative an influence on business performance of companies in the engineering sector. The tax reduced profit margins, sales, and competitiveness. Conclusions from the study were that adoption of tax policies by governments, to achieve increased revenue and growth of the economy may, in the process, negatively affect some sectors of the economy. It was therefore recommended that the government analyse potential contradictions and dilemmas before implementing tax policies. Further studies of the influence of IMTT on other sectors like the small scale and informal sectors that are usually hit the hardest by government policies is recommended.

Kritische Analyse der Besteuerung indirekter Grundstücksübertragungen

Due to constantly increasing tax burdens and numerous successive legal adjustments, the real estate transfer tax is becoming increasingly relevant. While demands for legal reform in this respect are becoming louder, the goal of this thesis is to find a consistent, coherent and comprehensible new design for share deal regulations in the context of the real estate transfer tax. Based on a wide variety of case constellations, the study conducts a detailed application analysis of the legal standards for share deals (§ 1, paras. 2a, 3 and 3a of the GrEStG, Germany’s law on the aforementioned tax) de lege lata, followed by an analysis of various alternative proposals in this respect and their eventual implementation. The evaluations are based on a comprehensive catalogue of criteria, including economic effectiveness, planning and legal certainty, and systematic coherence. The study concludes by considering both their incorporation into the real estate transfer tax law and consistency within the overall system of German tax law. Due to the study’s diverse analytical perspectives, its results provide information and new impetus for the current debate on share deals.

Abolition of Tax on Acquisition of Immovable Property: A Tool to Suppress the Negative Consequences of Covid-19 or a Politicum?

The tax on acquisition of immovable property was abolished on September 26, 2020 in the Czech Republic. One of the reasons mentioned in the explanatory report to the Act was the statement that the abolition deals with the effects of this virus on society. The main aim of the article is to answer the question of whether the abolition of the tax on acquisition of immovable property is a tool to suppress the negative consequences of Covid-19 or a politicum. To get the answer, it is necessary to shortly describe the tax on acquisition of immovable property and its structural components and make a basic comparison with the other EU Member States. We also summarise the pros and cons of the tax and related findings of the Constitutional Court. As the property transfer tax is connected with the income tax and there were several amendments in the proposal, it is needed to analyse these changes. Based on the research, it is possible to conclude that the abolition of the tax on acquisition of immovable property is definitely not a tool to suppress the negative consequences of Covid-19; it is just a politicum: political parties believe that the abolition of the transfer tax brings them more voices in the elections.