Online Reporter
Business Reporter
The 2026 National Budget will see users of the local currency paying less in transaction charges, following the reduction of the Intermediated Money Transfer Tax (IMTT) from 2 percent to 1.5 percent.
However, the Value Added Tax (VAT) has been revised upwards from 15 percent to 15.5 percent.
Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, presented the measures as a balanced recalibration of the tax system.
VAT increase
Effective 1 January 2026, the standard VAT rate will increase by half a percentage point, from 15 percent to 15, 5 percent.
What this means for you: Businesses often pass the increased cost of tax onto consumers to maintain their profit margins.
Minister Ncube framed the hike as a “quid pro quo” to compensate for revenue lost from other tax relief.
IMTT changes: A nudge to use ZiG
The budget introduced a significant shift for the Intermediated Money Transfer Tax (IMTT), commonly referred to as the electronic transaction tax.
The good news for ZiG users: The IMTT rate on transactions in the local currency, the ZiG, has been reduced from 2 percent to 1, 5 percent. This means that sending money, paying for goods, or transferring ZiG electronically will now incur a lower tax, making digital transactions in the local currency slightly cheaper.
No change for US dollar users: The IMTT rate on foreign currency transactions will remain at 2 percent. This creates a clear incentive to hold and use ZiG for daily transactions, as the Government aims to bolster the use of its domestic currency.
The bottom line
The Government’s strategy is clear: It is using the tax system to encourage the use of the ZiG while seeking to maintain revenue. For the public, the outcome is a trade-off.
If you conduct your financial life primarily in ZiG, you will see a slight reduction in transaction taxes.
If you use US dollars, your transaction costs remain the same, and you are not immune from the VAT increase.
Ultimately, the benefits of the IMTT changes are more targeted, favouring those who fully embrace the local currency.
