Finance Minister Mthuli Ncube has announced a partial reduction to the controversial Intermediated Money Transfer Tax (IMTT), commonly referred to as the 2 percent tax, for transactions made in the Zimbabwe Gold (ZiG) currency. The move, presented as part of the 2026 National Budget on Thursday, 27 November 2025, is designed to promote the use of the local currency. However, the decision to lower the rate from 2% to 1.5%, rather than abolish it, falls far short of public demands and those of the ruling party itself.
The announcement comes after intense pressure to scrap the 2 percent tax entirely. Just weeks earlier, on 5 November 2025, Minister Ncube had staunchly defended the tax in Bulawayo, calling it a critical revenue source that had kept the government afloat, even as calls for its removal grew louder.
A Budget Compromise Amidst Mounting Pressure
Announcing the 2026 National Budget from the new Parliament Building in Mt Hampden, the Minister of Finance, Economic Development, and Investment Promotion outlined the new budget measures. The key change involves reviewing the IMTT rate for specific transactions. The official announcement from Mthuli Ncube said,
“Review of Intermediated Money Transfer Tax from 2% to 1.5% in order to promote use of local currency and lower transaction costs. IMTT on foreign currency transactions will be maintained at 2%.”
This creates a two-tier system, effectively making transactions in ZiG 0.5% cheaper than those in US dollars. The change is a clear attempt to incentivise the adoption of the local currency. However, the relief is minimal compared to the widespread call for the tax’s complete elimination.
A Direct Rebuke of Party Directives?
The budget measure appears to directly contradict a resolution from the ruling ZANU PF party. During its annual conference in Mutare on 18 October 2025, the party passed a firm and public resolution demanding the government “drop the 2% transaction tax (IMTT).” This had set the stage for a major internal policy clash, pitting the party against its own finance minister.
At the November pre-budget meeting, Ncube had hinted at this trade-off. He told lawmakers that removing the IMTT would create a massive revenue gap. He outlined a possible compromise, suggesting that lowering the IMTT would necessitate an increase in another tax, such as Value Added Tax (VAT). The new budget confirms this approach, with a VAT increase to 15.5% scheduled for 1 January 2026.
The 0.5% reduction is a small concession in a long-running battle over a tax that has been deeply unpopular for years. It remains to be seen whether this partial measure will satisfy a public and a political base that has been calling for the tax’s complete removal.
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