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Business Reporter
TREASURY has reduced the Intermediated Money Transfer Tax (IMTT) on ZiG transactions from 2 percent to 1,5 percent, to ease the cost of transacting in local currency and encourage the wider use of the ZiG across the economy.
This also comes after the ruling Zanu PF party, among the key resolutions at its Annual National People’s Conference in Mutare last month, directed the Government to adjust the IMTT to ease the cost of doing business.
And in response to the outcry from businesses that the transaction tax has become a high cost to business, the Treasury has designated IMTT as a tax-deductible expense for purposes of Corporate Income Tax computation.
To partially compensate for the revenue forgone arising from the IMTT rate reduction and deductibility measures, Treasury has increased the Value Added Tax rate by 0,5 percent from 15 percent to 15,5 percent, effective January 1, 2026.
The measure is expected to preserve fiscal balance, whilst maintaining VAT within a regionally competitive range.
Presenting the 2026 National Budget Statement at the New Parliament Building in Harare yesterday, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the reduction would take effect on January 1, 2026.
The review forms part of broader measures to refine the tax framework while supporting economic growth.
“The IMTT remains a major and stable source of non-discretionary revenue, contributing about 8 percent of total tax revenue annually,” he said. “However, its high incidence on business transactions and liquidity flows has made it distortionary, particularly in a dual currency environment.”
Prof Ncube said reducing the tax on ZiG transactions would promote digital payments and strengthen confidence in the domestic currency.
“I am therefore proposing to review the IMTT framework by reducing the IMTT rate on ZiG-denominated transactions from 2 percent to 1,5 percent, in order to promote use of local currency and lower transaction costs,” he said.
Prof Ncube emphasised that the foreign currency IMTT rate will remain unchanged at 2 percent.
