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Business Reporter
Zimbabwe’s Treasury chief, Professor Mthuli Ncube, has frozen tax bands for the 2026 fiscal year, pinning the decision on a projected “downward trend” in inflation that he expects to hit single digits by the end of March next year.
In a marathon parliamentary session that concluded after midnight on Tuesday, the Minister of Finance, Economic Development and Investment Promotion rejected pleas from lawmakers to adjust tax thresholds, arguing that the current economic stability does not justify a review at this stage.
Addressing the National Assembly during the final stages of the 2026 Finance Bill, Professor Ncube stated that tax band adjustments are typically driven by rising inflation, whereas the current outlook for both the United States Dollar (USD) and Zimbabwe Gold (ZiG) is positive.
“We expect annual inflation actually to be single digit at the end of Q1 next year and so will USD inflation,” the Minister told the House. He emphasised that the Treasury remains “systematic” in its approach, linking any changes to a rigorous analysis of salary adjustments and macroeconomic impacts.
While he acknowledged that “macroeconomic shocks” could necessitate a review during the Mid-Term Budget in July 2026, he maintained that the current bands remain appropriate.The decision drew sharp criticism from opposition lawmakers, who argued that the lack of adjustment creates a lack of “equity” between workers paid in different currencies.
Critics noted that under current exchange rates, those earning in local currency effectively have a lower tax-free threshold than those earning in USD.
