FINANCE minister Mthuli Ncube’s announcement that the government will soon gazette new legal measures to reduce licences, fees and levies is a welcome and long-awaited step in the right direction.
After years of calls from businesses and ordinary citizens for a friendlier operating environment, this development signals intent to make the “ease of doing business” mantra more than mere rhetoric.
By easing regulatory and financial bottlenecks across key sectors — from tourism and agriculture to retail and energy — the government is, at least on paper, taking a meaningful stride towards stimulating productive activity and lowering the costs of compliance that have long suffocated enterprise.
For ordinary Zimbabweans, these legal instruments represent an opportunity for relief from the cumulative bureaucratic pressures that have filtered down into the prices of everyday goods and services.
As Ncube said, government will now “walk the talk” on its reform promises, with new statutory changes “trickling in from next week.”
The reduction of licences and permit fees has the potential to inject liquidity and confidence into the economy by removing friction from commerce.
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Every licence or levy, whether charged to micro-enterprises in retail or large operators in transport, ultimately finds its way to the consumer price.
When bureaucracy becomes an industry in itself, citizens inevitably pay for inefficiency.
Therefore, easing the regulatory burden could free up capital for more productive use, motivate small entrepreneurs to formalise operations and encourage reinvestment.
It could also begin to reverse the perception that the Zimbabwean State is more a collector of fees than a facilitator of growth.
These reforms may not immediately alter macroeconomic fundamentals, but they represent a crucial acknowledgement that the formal economy cannot thrive under the weight of proliferating permits, overlapping levies and ever-rising compliance costs.
And yet, the virtue of these positive moves risks being overshadowed by one stubborn policy: the Intermediated Money Transfer Tax (IMTT). Introduced in 2018 as a short-term revenue measure, the levy has instead evolved into a structural impediment to financial inclusion and economic fluidity.
Minister Ncube continues to defend it as “one of the taxes that have kept us going as a country and as a government,” arguing that removing or reducing it will “blow a hole in the national purse” that must be filled by higher taxes elsewhere.
To this line of reasoning, one must ask — at what cost does the government keep itself “afloat”?
IMTT, which charges 2% on virtually all electronic transactions, punishes both consumers and businesses for participating in the formal economy, discourages the use of digital payment systems, and deepens the overreliance on cash that Zimbabwe has been trying to reverse for more than a decade.
The reality on the ground is that IMTT is especially cruel to ordinary Zimbabweans.
Unlike corporations that can occasionally pass on costs, low-income citizens have no such buffer.
The tax eats into wages, small remittances and routine transactions — the very mechanisms through which digital finance could serve as a ladder out of poverty.
To make matters worse, as citizens in rural areas depend largely on mobile money due to the unavailability of the ZiG and other cash shortages, the IMTT becomes an unavoidable penalty on the poor.
The government’s own encouragement of electronic payments is undermined by this contradictory policy; it cannot in good faith champion a cashless economy while taxing the digital rails that sustain it.
The fiscal justification for maintaining the tax — that it accounts for around 8% of total tax collections — cannot outweigh its destructive impact on productivity and inclusion.
Between 2017 and 2024, electronic transactions plummeted by nearly 29%, while point-of-sale use dropped by more than half, reversing gains in formalisation and banking.
This disintermediation has not only shrank bank deposits it also distorted cash circulation, making revenue collection even harder.
The government’s own data suggest that clinging to IMTT in its current form may be counterproductive: it erodes the base it seeks to tax. As economist Misheck Ugaro noted, “wiping it off has many implications,” but so does keeping it unchanged — the latter risks “increasing the budget deficit, which could stoke inflation,” unless a balanced alternative is pursued.
Ncube’s argument that cutting IMTT would require a compensatory rise in value added tax (VAT) is unconvincing.
VAT is already regressive, disproportionately affecting consumers. Raising it would compound the hardship already inflicted by IMTT and inflated retail prices.
Instead, the solution lies in broadening the tax base, sealing leakages and improving fiscal governance. The minister has acknowledged the importance of reforms in “reducing the cost of doing business,” but these efforts must extend beyond procedural simplifications. Zimbabwe haemorrhages potential revenue through illicit financial flows, smuggling and mismanagement at border points.
If Treasury invested in strengthening enforcement capacity, digitalising customs processes and curbing corruption within revenue-collecting agencies, it could recoup far more than IMTT contributes — and without suffocating legitimate transactions.
The wider context demands strategic rebalancing rather than rigid defiance.
The Zimbabwe National Chamber of Commerce has proposed that Treasury makes IMTT deductible for corporate income tax and gradually reduce it to 1% on USD transactions and 0 percent on ZiG payments, with eventual elimination by 2027.
Such a pragmatic, phased approach could sustain revenue flows while restoring public confidence.
Similarly, the Bankers Association of Zimbabwe has argued that removing IMTT “will incentivise formal banking, expand the taxable base and reduce cash-based informality.”
These sectoral voices are not calling for fiscal recklessness but for smart economics — policy coherence that rewards, rather than punishes, productive and traceable financial behaviour.
In fairness, Ncube faces a delicate balancing act between fiscal survival and economic stimulation.
Zimbabwe’s narrow fiscal space and limited access to credit leave Treasury leaning heavily on domestic taxation.
However, sustainability cannot come at the cost of citizen welfare. Financing the State by weighing down its people is both politically and morally untenable.
Revenue generation must be underpinned by fairness, efficiency and inclusivity. Taxation should nurture, not throttle, the same economy it draws from.
Eliminating unnecessary licences and simplifying business processes is commendable, but maintaining punitive taxes like IMTT undercuts such progress.
The minister’s campaign to “walk the talk” through gazetted legal reforms can only achieve full credibility if it also confronts the policies that continue to exert daily pain on the populace.
IMTT in its current form is emblematic of an outdated fiscal reflex — taxing money movement rather than wealth creation.
If the government channels its energies to efficient tax administration, modernisation of the Zimbabwe Revenue Authority, tighter border controls and harnessing technology to detect illicit flows, it could unlock thousands of untaxed but legitimate economic activities currently lost to the shadows.
Ultimately, fiscal endurance in Zimbabwe will not be secured by taxing the already compliant.
It will emerge from trust — public trust that what is collected is well-managed and business trust that the State is a growth partner, not a tollgate.
Cutting licences and fees shows a welcome sensitivity to that principle.
Now, the government must extend that same logic to MTT: lessen the burden, embrace reform and build a fiscal structure that uplifts instead of depleting its citizens.
As the economy stands at the crossroads of recovery and resentment, the choice between defiance and adaptation could define not only Mthuli Ncube’s legacy but Zimbabwe’s economic future itself.
- Lawrence Makamanzi is an independent researcher and analyst, passionately sharing his insights in a personal capacity.