Bulawayo Bureau
FINANCE MINISTER Professor Mthuli Ncube insists the sugar content tax will not be reviewed as it is critical in discouraging excessive sugar consumption and financing healthcare.
Beverage manufacturers have been lobbying for the tax, which was introduced in January 2024, to be reduced.
Responding to submissions during the final session of the 2027 Pre-Budget Seminar in Bulawayo yesterday, Prof Ncube said the current tax structure followed extensive consultations with beverage manufacturers and should not be weakened to the extent of undermining its intended objectives.
“There is need for Government to adequately finance health costs associated with excessive consumption of added sugar, hence the introduction of the tax,” he said.
“Whereas it is important to benchmark with regional peers, I am pleased to advise that the current rate of US$0,001 per gramme is a result of extensive consultations with beverage manufacturers, which presents an administratively simple methodology of exempting the first 4g of added sugar.”
Prof Ncube said manufacturers should respond to the levy by reducing the amount of added sugar in their beverages rather than treating it as an additional tax on sugar production.
“There is, thus, need to minimise the risk of making the tax ineffective, also considering that the measure is misconstrued as a tax on sugar production. Ordinarily, manufacturers should take a deliberate decision to reduce the component of added sugar in specified beverages in order to protect consumers,” he said.
The Government collected US$29,1 million from the levy in 2024, with collections rising to about US$59,4 million in 2025.
Prof Ncube also addressed several proposals submitted during the Pre-Budget Seminar, outlining Treasury’s position on fuel pricing, presumptive tax collection, corporate interest deductions, mining royalties and incentives for manufacturers.
On calls for the Government to introduce a fuel price subsidy, Minister Ncube said Treasury had already taken steps to cushion consumers and businesses through the removal or temporary reduction of fuel taxes. He said the measures, implemented since March 2026, were intended to ease pressure on the productive sector and the general public while containing inflationary pressures associated with rising fuel prices.
“At the peak of the Middle East conflict, Government had to forego an average of US$30 million per month in order to reduce fuel costs. The current price of diesel is also a result of the reduction of fuel taxes, which has gone a long way in easing inflationary pressures,” he said.
On proposals for the Zimbabwe Revenue Authority (ZIMRA) to collaborate with local authorities in collecting presumptive taxes, Prof Ncube said existing legislation already provided for such an arrangement.
Local authorities are entitled to a 10 percent incentive on revenue collected under the mechanism, while Treasury is working with councils to improve administrative arrangements, taking into account challenges they face in collecting statutory rates.
According to Prof Ncube, proposals to introduce a sliding-scale, price-linked mineral royalty regime in the mining sector would also be examined, taking into account administrative complexities and potential revenue losses.
Overall, Treasury also cautioned against introducing further tax concessions without carefully considering their impact on domestic revenue mobilisation and the country’s long-term development objectives.
