Mthuli Ncube Defends Zimbabwe’s 2% Tax Against Rising Pressure, Says It’s Essential For Government Survival

Mthuli Ncube Pushes Back Against ZANU PF Resolution To Remove 2% Transfer Tax

Finance Minister Mthuli Ncube is standing firm against mounting pressure, including from within ZANU PF itself, to abolish the controversial 2% tax on electronic transactions. He has described the Intermediated Money Transfer Tax (IMTT) as a critical revenue lifeline that has kept government operations functioning during difficult financial periods.

A Key Source Of Funding Revealed In Bulawayo

Ncube set out his position during a pre-budget engagement with Members of Parliament in Bulawayo on 5 November 2025. He addressed growing calls to scrap the tax, which has long been unpopular with ordinary citizens and businesses.

According to a post shared on X by Nick Mangwana, the Permanent Secretary for the Ministry of Information, Ncube highlighted the tax’s importance in sustaining major government programmes. Mangwana quoted the Minister as saying:

“IMTT has kept us going.”

Mangwana added that Ncube specifically pointed to infrastructure spending and COVID-19 vaccine procurement as programmes supported by the levy.

Further reporting from newZWire on the same date described Ncube’s warning to lawmakers. Ncube reportedly explained to MPs:

“Removing the tax would leave a revenue gap that could only be filled by making what would be another unpopular move: raising VAT.”

The Minister also stressed to Parliament that the IMTT accounted for around 8% of Zimbabwe’s total tax collections by the end of 2024.

The ZANU PF Rebellion

Pressure intensified on 18 October 2025 when ZANU PF used its annual conference in Mutare to push for the levy’s immediate removal. Delegates adopted a firm resolution calling for government to “drop the 2% transaction tax (IMTT).”

The tax has been criticised for years for increasing the cost of doing business and tightening household budgets with every electronic payment.

The ruling party’s public stance now places its own finance minister in a difficult position. Ncube’s policy justification directly conflicts with the outcome of the Mutare conference.

A Proposed Tax Trade-Off

Despite defending the tax, Ncube signalled a willingness to explore alternatives. Addressing MPs in Bulawayo, he outlined a possible compromise involving two major tax instruments.

According to newZWire, Ncube told lawmakers:

“He proposes a trade-off, lowering IMTT by half a percent if VAT is increased by the same margin.”

This proposal reflects the delicate balancing act facing Treasury. With the IMTT bringing in billions of Zimbabwe dollars annually, its sudden removal would require an immediate substitute to prevent the collapse of key government functions.

Ncube made it clear that while the tax is unpopular, its revenue is essential. If one source is removed, another must replace it.