By Paidamoyo Muzulu
Africa-Press – Zimbabwe. ON Thursday, Finance minister Mthuli Ncube presented the 2026 national budget, a document which is anti-poor and continues on the path of austerity to achieve an upper middle-income economy by 2030.
The budget cared for the rich and at every turn, squeezed the poor and formal gold miners for more cash.
Ncube, while dressing the budget as pro-growth and putting the nation on a sustainable growth trajectory, made sure the growth is sustained by the blood and sweat of the working poor.
The minister in a slight of hand reduced intermediate money transfer tax (IMTT) by 0,5% in local currency, but immediately increased value-added tax (VAT) by the same amount.
Ncube said: “Reduction of IMTT rate on ZiG-denominated transaction from 2% to 1,5%, in order to promote use of local currency and lower transaction costs. IMTT on foreign currency transaction will be maintained at 2%.”
Let us interrogate this tax relief supposedly for the poor and informal traders.
The Reserve Bank of Zimbabwe (RBZ) recently confirmed that 76% of all transactions were done in US dollars, while a paltry 24% were in ZiG.
In other words, the supposed tax relief will benefit the minority who were transacting in local currency.
If, by the RBZ statement on currency, use remains the fact, then it means the majority of mobile money transaction are still taxed at 2% since they are in US dollars.
Ncube then added the killer punch, a 0,5% increase on VAT.
He said: “As a quid pro quo to the above concessions and to partially compensate for the revenue foregone arising from IMTT rate reduction and deductibility measures, I propose to increase VAT rate by 0,5% to 15,5%, effective January 1, 2026.”
It is a fact that VAT affects the poor and working class more than the rich.
It is not progressive.
Without being academic about it, the simple fact remains — the cost of goods and services will go up.
Ncube has been a late comer to taxing e-commerce.
He tried to make up for lost time by introducing digital services withholding tax.
Said Ncube: “I propose to introduce digital services withholding tax in lieu of VAT on imported services, for payments made to offshore digital platforms, including e-hailing fees, online content charges and satellite-based internet access fees. The tax will be withheld by paying agents that include financial institutions.”
We are not sure how it will be applied in practice, but the cost of conducting e-commerce will rise.
The minister did not want to lose out on the firming prices of gold on the international markets.
He introduced a tiered scale of royalties (tax) tied to the price of the precious metal per ounce.
Ncube said if gold is sold at above US$2 501/Oz, then royalties would be at a flat 10%.
This will hit the big formal mining houses.
They cannot escape this tax unlike their counterparts, the artisanal miners.
It remains to be seen how the Chamber of Mines will react to this new tax regime.
However, retrenchments at mines are a real possibility as mines try to maintain their profit margins.
While Ncube was taxing everyone else, Mutapa Investment Fund (formerly Zimbabwe Sovereign Wealth Fund), for the second year running got more concessions.
In the 2025 Finance Bill, the proposed Act to give effect to the revenue collection in 2026, Ncube exempted Mutapa Investment Fund from a raft of taxes.
Among the reprieves: Mutapa Investment Fund will not pay IMTT on its transactions, it was exempted from paying capital gains tax and finally exemptions from transaction on which tax is payable under Income Tax Act.
This is the same Fund that in 2025 was exempted from complying with procurement laws.
The Fund is only answerable to the President.
For context, Mutapa Investment Fund, according to the government, is now valued at US$16 billion.
This US$16 billion investment is shielded from scrutiny, exempt from paying taxes and further more, exempt from complying with procurement laws.
Only a single person or entity has far benefited from Mutapa Investment Fund.
The entity that owned 35% of Kuvimba Mining House cashed a healthy US$1,6 billion when it sold its stake to Mutapa Investment Fund.
The taxpayers’ woes do not end there.
The sovereign debt continues to soar.
Ncube told Parliament that the total public debt now stood at US$23,4 billion, representing 8,5% increase from US$21,5 billion as at end of December 2024.
He said: “The increase in the stock of debt from end of December 2024 is primarily attributed to the increase in domestic expenditure arrears to service providers, which increased from US$34 million in December 2024 to US$1,3 billion as at end of September 2025.”
The debt to GDP ratio, after rebasing the economy, is now 46%.
And Ncube projects that the GDP will reach US$52 billion in 2026.
Ncube now proposed to cap borrowing in 2026 at 5,75% of the GDP.
No one is certain whether the borrowing is based on the 2025 GDP or project 2026 GDP.
Said the finmin: “The annual borrowing limit for 2026 is capped at 5,75% of the GDP, which is made up of central government, including borrowing for budget financing at 3%, guarantees for State-owned enterprises, including on lending from central government at 2% and borrowing power authorities to local authorities at 0,25%.”
Whatever happens, the poor will carry the can.
Only this year, Ncube said he could not implement the Wealth Tax for the rich.
It, therefore, follows that the easy target — the poor — will be bled to death by taxes.
The sad part in all this, MPs clapped and roared at the budget that raped the poor — the people they represent — simply because the housing and car loans were guaranteed on top of new disbursements of Constituency Development Fund.
The poor have been sacrificed.
Source: NewsDay
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