Harare – In a significant development for Zimbabwe’s economic policy, Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube, has announced that Treasury is open to revisiting some of the controversial tax measures outlined in the 2025 National Budget. Speaking at the 2025 post-budget breakfast meeting in Harare on Monday, Ncube acknowledged growing concerns from captains of industry, commerce, and economists, signaling potential changes to key taxation policies.
Minister Ncube revealed that Treasury has initiated studies to assess the impact of specific taxes on businesses, particularly the intermediated money transfer tax (IMTT), popularly known as the 2% tax. “We have directed the Treasury to do a study on the impact of the intermediated money transfer tax on businesses, and we are ready to review based on the results of the studies,” he said. He urged businesses to continue submitting their views, adding, “We have January and the midterm policy review, where we could make some adjustments based on actual facts on the ground.”
Industry Concerns on IMTT
The IMTT, a 2% tax on all electronic money transfers, has faced widespread criticism from business leaders who argue that it has hurt profitability, reduced sales, and eroded competitiveness. Additionally, the tax is blamed for increasing operational costs, including those associated with staff, electricity, rentals, and other overheads.
While defending the introduction of the taxes as measures aimed at boosting the economy, Ncube acknowledged the need to strike a balance between revenue collection and sustaining business operations. “The tax measures are meant for the good of the economy, including addressing health issues, protecting local industries, and supporting environmental initiatives,” he explained.
Green Taxes and Industry Protection
Highlighting some of the progressive elements of the budget, Minister Ncube pointed to the introduction of taxes aimed at promoting environmental sustainability. He noted that while many countries have banned plastic bags, Zimbabwe opted for a surtax on plastic bags to protect local industries. “I resisted calls to shut down companies producing plastic bags and instead introduced a surtax to avoid killing industries,” he said.
He also defended the recently introduced fast-food tax, describing it as a measure to bridge funding gaps in the health sector, which faces challenges due to shifting global funding priorities.
Supporting Green Energy and Local Manufacturing
Ncube outlined additional measures aimed at promoting green energy and reducing import dependency. He highlighted incentives for developing charging stations for electric vehicles, part of a broader plan to align Zimbabwe with global trends. The minister also emphasized incentives for local manufacturing, particularly in the automotive sector, including car and bus assembly. “These efforts are designed to stimulate local industry and reduce reliance on imports,” Ncube said.
Potential Tax Adjustments in 2025
The finance minister’s remarks suggest a willingness to engage with stakeholders and revisit contentious taxes as part of the midterm fiscal review.