CZI calls for complete removal of IMTT

Sikhulekelani Moyo, Zimpapers Business Hub

CONFEDERATION of Zimbabwe Industries (CZI) has suggested the total removal of the Intermediated Money Transfer Tax (IMTT), saying that it is a disincentive to formalisation and digitalisation, which sees businesses and individuals shunning formal transactions.

IMTT is a levy on electronic financial transactions, which was introduced by the Government in 2018 through Statutory Instrument (SI) 205 of 2018.

CZI said Zimbabwe has relied on the IMTT as part of its revenue mix through a prolonged period of economic stress, informality, and dollarisation.

The organisation said that while IMTT has provided a convenient short-term revenue source, its cumulative impact on formal businesses, electronic transactions, and multi-stage value chains is now making conditions increasingly difficult for production, investment, and competitiveness.

Therefore, CZI has suggested that IMTT be removed in the budget cycle, with effect from the start of the new fiscal year.

The industry lobby organisation said that at this stage of Zimbabwe’s development, the costs of IMTT to formalisation, investment, and competitiveness significantly outweigh its benefits as a convenient revenue instrument.

“IMTT falls primarily on formal electronic transactions; many cash and informal transactions fall outside its reach. The rational response for some firms and households is to reduce use of the banking system and digital platforms to limit the tax,” reads an update from CZI.

“Over time, this weakens financial intermediation, slows progress on digital payments, and narrows the visible tax base.

“We therefore see its removal in this budget cycle as an important step in the next phase of tax and industrial policy reform.”

In his 2026 National Budget Presentation, Minister of Finance, Economic Development and Investment Promotion, Prof Mthuli Ncube, proposed the reduction of IMTT rate on ZiG-denominated transactions from 2 percent to 1,5 percent, in order to promote the use of local currency and lower transaction costs.

He said IMTT on foreign currency transactions will be maintained at 2 percent.

He also proposed to designate IMTT as a tax-deductible expense for purposes of Corporate Income Tax computation, and expand the definition of financial institution for purposes of IMTT to include microfinance institutions.