More Taxes Set To Be Paid Exclusively In ZiG As Treasury Deepens Local Currency Drive
The Government is preparing to widen the list of taxes that must be paid exclusively in Zimbabwe Gold (ZiG).
The changes are expected to be unveiled in this week’s Mid-Term Budget Review.
The proposed changes form part of an ongoing programme aimed at increasing the circulation and everyday use of ZiG across the economy.
Treasury Targets Stronger Demand For ZiG
According to The Herald, Minister Ncube said expanding ZiG-only tax payments would help reinforce the currency’s role in domestic transactions by ensuring businesses and individuals regularly require the local unit to meet their tax obligations.
He said the policy was part of a long-term plan to support the circulation of ZiG, adding that Treasury believes the currency has remained stable since its introduction.
While Government has confirmed that more taxes will become payable exclusively in ZiG, it has not yet specified which tax categories will be affected. It remains unclear whether the changes will apply to taxes such as Pay As You Earn (PAYE), Value Added Tax (VAT), customs duties, corporate income tax, capital gains tax or other statutory payments.
At present, taxpayers generally settle taxes in the same currency in which their income or transactions are earned under Zimbabwe’s multi-currency system.
Part Of Zimbabwe’s Mono-Currency Road Map
The planned reforms are also linked to Government’s long-term goal of eventually returning Zimbabwe to a single local currency system.
Authorities have identified eight economic conditions that must be achieved before abandoning the multi-currency regime. According to monetary authorities, six of those targets have already been met.
The two remaining challenges are increasing demand for ZiG and building foreign currency reserves to internationally recommended levels.
Officials believe expanding ZiG tax payments will help address one of those outstanding requirements by creating consistent demand for the local currency.
Confidence In ZiG Continues To Grow
Reserve Bank of Zimbabwe figures indicate that the use of ZiG has steadily increased since its launch in April 2024.
Electronic transactions conducted in ZiG have reportedly risen from around 26 percent at the time of its introduction to between 35 and 40 percent of all transactions processed through the National Payments System.
Authorities also say cases of businesses charging different prices based on currency have declined, while acceptance of ZiG continues to improve.
Minister Ncube said Government would continue introducing additional measures designed to strengthen public confidence in the currency.
More Measures Planned To Support Local Currency
Treasury has already introduced several policies aimed at increasing the use of ZiG.
These include requiring businesses to pay half of their Quarterly Payment Dates (QPDs) in ZiG, paying public sector suppliers in the local currency and lowering the Intermediated Money Transfer Tax (IMTT) on ZiG transactions from 2 percent to 1.5 percent while retaining the 2 percent rate for US dollar transactions.
Government is also working to improve access to physical ZiG cash.
Minister Ncube confirmed that higher denomination banknotes will soon enter circulation following the unveiling of the new ZiG100 and ZiG200 notes, which will join the existing ZiG10, ZiG20 and ZiG50 denominations.
The post More Taxes Set To Be Paid Exclusively In ZiG As Treasury Deepens Local Currency Drive appeared first on iHarare News.
