Zimbabwe News Update
zifmstereo
2 min read
“we are under pressure to reduce imtt or scrap it, but this is one of the taxes that have kept us going as a country and as a government,” professor ncube said. “we need these resources to run programmes — be it infrastructure, payment for vaccines, and all that. That’s where the resources are coming from.” he warned that any reduction or scrapping would have to be offset elsewhere. “you can allow us to remove imtt by 0.5%, but are you able to allow us to increase vat by that percentage? Would you agree with that? Because we need that revenue — we can’t function without it.” the dilemma underscores zimbabwe’s narrow fiscal space, with the imtt contributing significantly to total revenue. “yes, it’s a significant proportion.
Wiping it off has many implications, including increasing the budget deficit, which could stoke inflation,” said zimbabwe economics society vice-president misheck ugaro.“the other option would be cutting expenditure, but that’s not feasible — line ministries are already underfunded.” ugaro urged restructuring the tax rather than scrapping it outright. “it’s a progressive tax that touches everyone, but perhaps the minister can exempt vulnerable groups or basic transactions. Raising vat instead would be a worse solution,” he said. The imtt applies to nearly all electronic transfers — bank-to-bank, mobile money, online banking, zipit, and outbound foreign payments — at a flat 2 percent rate.
Industry groups describe the tax as “an albatross around the formal economy’s neck.” in its 2026 budget submission, the zimbabwe national chamber of commerce (zncc) warned that the levy “increases costs, distorts supply chains, and encourages cash usage,” undercutting the government’s push for a cashless economy. “we recommend that treasury make imtt deductible for corporate income tax in the interim and gradually reduce the rate to 1% on usd and 0% on zig transactions, with a clear roadmap toward total elimination by 2027,” zncc said. The ceo africa roundtable (art) echoed the call, warning the tax “distorts capital costs” and hurts formal business operations. Source: zifm stereo
