Impact of intermediated money transfer tax (IMTT) on growth of small to medium retailers: a case study of Simrac retailers

Abstract

Small and Medium Enterprises in Zimbabwe represents an important part of the economy and certainly of the labour market. The research focused on the impacts of IMTT on the growth of these SMR with specially reference to SIMRAC Kwekwe. The problem that led to this study is limited number of studies on IMTT and its impact on the growth of SMR. Also the tax policy was implemented as one size feet all regardless of its impact on liquidity position of SMR. . The objectives of the study were to evaluate the impact of Intermediated Money Transfer Tax (IMTT) on growth of Small to Medium Retail Shops and to determine the extent to which IMTT affects the liquidity position of Small to Medium Retailers (SMRs). Furthermore the researched evaluated the effects of IMTT on sales revenue and its impact on pricing of commodities by SMR. A mixed research design was used in the study were data was collected using questionnaires and interviews from different respondents drawn from the four departments at SIMRAC. Results showed that IMTT reduces the organisational profitability and does significantly increase organisational finance costs at SIMRAC. Furthermore Intermediated money transfer tax reduces liquidity for business organisation as evidenced by data obtained from SIMRAC. The research further found out that IMTT together with other taxes drains firms’ hard earned cash and are not improving growth at SIMRAC as perceived by government when it collects taxes. Although IMTT is increasing operational cost to SIMRAC and considered, the research find out that other factors such as operational environment are considered when pricing the commodities. For instance SIMRAC operates in the city centre close to OK and Pick and pay. It has to constantly check prices of other competitors.