THE 2026 National Budget prioritised tax collection over genuine relief for citizens, economists have said.
The 2026 National Budget, presented last Thursday by Finance, Economic Development and Investment Promotion minister, Mthuli Ncube, prioritised increased taxation over relief for individuals and corporates.
In an interview, economist Chenayimoyo Mutambasere expressed scepticism about the budget’s proposed measures, particularly the reduction of Intermediated Money Transfer Tax (IMTT) on ZiG transactions to 1,5%
from 2%.
“The reduction of IMTT on ZiG transactions from 2% to 1,5% is being sold as a gesture to promote use of the local currency, but in reality, it is a cosmetic adjustment that does not address the deeper issue; people avoid ZiG not because IMTT is high, but due to them not trusting the currency,” she said.
“The budget itself acknowledges that over 90% of cash withdrawals and payments occur in United States dollars, even after the so-called stabilisation of the ZiG. Cutting IMTT by half a percentage point will not shift behaviour when citizens have already lost savings repeatedly through currency reforms and when the wider fiscal environment is still unstable.”
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She said the government was reducing a distortionary tax in one area while tightening controls elsewhere, including new cash withdrawal levies and expanded surveillance of business transactions.
“The simultaneous increase of VAT [value added tax] from 15% to 15,5% tells the real story. VAT is the broadest, most regressive tax in the system—it hits every consumer regardless of income, and it disproportionately affects the poor who spend a higher share of their income on consumption,” Mutambasere said.
“Treasury explicitly states that the VAT increase is meant to partially compensate for revenue lost through the IMTT reduction. In other words, the government is giving with one hand and taking with the other, shifting the tax burden from a transaction levy to a consumption tax that everyone must pay.
“Combined with aggressive new measures targeting the informal sector from rental withholding to cash withdrawal levies and property attachment, the VAT hike shows that this budget is less about supporting economic activity and more about plugging revenue gaps by taxing ordinary citizens.”
Economist Vince Musewe expressed disappointment with the budget, highlighting that it prioritised increasing tax revenue over providing financial relief to citizens.
The 2026 National Budget aims to collect additional revenues of US$1,47 billion next year, as revenue collections are expected at US$9,4 billion from this year’s expected US$7,93 billion returns.
“The budget is disappointing and seems to focus on collecting more taxes than giving citizens a break. As we all contribute to the revenues, it is indeed sad that such revenues are utilised to reward loyal party cadres while the majority of citizens watch. We will not achieve an inclusive economy where patronage is rife,” Musewe said.
“The budget is also hardly transformative. Citizens must wake up to more taxes without an improvement in their quality of life.
“The projected growth merely benefits monopolies and oligarchs. Zimbabweans are not feeling any change as urban poverty spreads. We need new thinkers.”
Economist Tony Hawkins said the adjustments in tax percentages excessively benefited the government at the expense of the taxpayers.
He criticised the budget for its absence of a clear strategic direction, emphasising the need for a more balanced approach.
“I am not just reading things as they are. Taking half a percentage point of the IMTT, which applies to about 30% of transactions, and adding half a percent to the VAT, which applies to 70%-80% of transactions, is obviously in favour of the government rather than the community. The VAT will produce more money than they’re surrendering,” he said.
“The rest of the changes are so small that they have no real significance. The macro numbers look robust but depend heavily on one factor: the gold price. If anything were to go wrong there, even though I do not think it will, it could lead to problems. The disappointing aspect is the lack of strategy or direction in the budget.”
He said the minister would no doubt mention the next five-year development plan, which was typical of communists.
“However, there’s still no mention of an agreement with the IMF [International Monetary Fund] on a staff monitored programme, despite promises for the last three years. Furthermore, we have yet to see a detailed road map for a new currency in the budget,” Hawkins said.
“The overall impression I got is that it’s a complacent document, suggesting that everything is fine and there’s no need to fix what’s broken.”
Economist Gift Mugano said the changes have not led to any meaningful improvement in the cost of doing business, emphasising that despite nominal decreases, the simultaneous increase in VAT means that the overall financial landscape remains unchanged.
This, he added, left businesses in the same position as before.
“The IMTT has been reduced by 0,5%. Even with this reduction, there is no significant change in the cost of doing business. We find ourselves in the same situation,” Mugano said.
“As noted in the paper, we reduced the rate by 0,5% on IMTT, but we have also increased the VAT as an additional tax. Essentially, these two taxes mean that nothing has fundamentally changed, and we are still at square one.”