This a take on the negative and some drips of the positive impact on the 2026 budget to a common man. A common man is a peasant, a worker, the unemployed, miners and the farmer. The budget shall cause a scream.
The youth must forget employment. This budget is predicated on more tax. Without a finance policy that promotes gazelles, new and disruptive industrial revolution and inclusive growthit is so clear job creation shall remain a mirage. It’s possible an ordinary shall get to old age without ever been issued with a payslip, paye number and even visiting a bank ATM.
The budget proposal has revenue target of ZWG 287.6 trillion up from ZWG$215.7 trillion in 2025. With inflation in the period being 32.7 percent it means the revenue target contracted instead of increasing. We should expect slightly less of provision of public goods and government interventions as the tax base is not expected to grow but decline.
The inflation rate declined from 82.7 percent to 32.7 percent. All being equal this may result in stability of prices in ZiG. It is a lot unfortunate that this stability may not be felt as less than 10 percent of transactions are in ZiG. Prices shall continue increasing as our currency of transaction is US dollar with a very unusual inflation of 13%.
The government continues in a trajectory to curb unhealthy habits. In 2025 there was introduction of sugar tax and in 2026 there is fast food tax of 5 percent. The largest fast food company by revenue in 2025, Sambisa Brands, absorbed a similar 1 percent tax in 2025 at the detriment of the quality of its earnings. It is doubtful they will do the same in 2026 as they may tilt into a loss. We must expect increase in prices for fried chicken, chips, burgers, wraps, tacos, wraps and so forth in 2026.
Transitory banking has always resulted in substantial loss of value often as high as 10 percent for anyone careless to bank. In a bid to increase the pain the minister in his wisdom or lack thereof has introduced an additional 2 percent withdrawal fees. The already taxed deposit will be further taxed in addition to bank charges. The majority MAY decide to do under mattress banking and the risk involved in that is huge including robberies.
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At Zanu Pf conference a resolution was passed to scrap IMMT of 2 percent. The minister who is a member of the party decided to go against the grain by maintaining the IMMT for US dollar transactions. In as much as he reduced the IMMT on ZiG transactions to 1.5 percent its only great on paper. ZiG transactions are so insignificant to as low as 3 percent. This means more suffering if you look at revenue recovery through VAT.
To “recover” the 0.5 percent the budget proposal is to increase VAT by the same percentage as reduction on IMMT.As the currency of transaction is US dollar it means price increases in most product lines especially if US dollar inflation is factored. It’s unusual that a VAT proposal can be adopted that is tailored to increase human suffering.
There is a “directive” to reduce license fees and permits issued by council by 50 percent. Great idea as it will reduce cost of doing business and MAY BE reduce prices consumers get from their retailers, distributors and so forth. Unfortunately, councils were already struggling and giving paltry service and this will only increase their inability to offer quality service.
This country major exports include gold and its mostly mined by small scale miners. According to the president of Zimbabwe Miners Federation, Henrietta Rushwaya, small scale miners employ over a million youths. In a very weird, wild and absurd thinking the budget proposal is to have royalties of 10 percent for gold deliveries. For a common man this is a transfer of wealth from an ordinary “korokoza” to wealth middleman who have private jets and can afford plane tickets who smuggle their sweat. This will make the miners subject to price manipulation, extortion and significant loss of income.
The inflation trend is on a downward trajectory and it’s a great thing. All being equal it aids in economic stability and move family financial planning from uncertainty to low risk. It’s the mono currency proposal by the central bank that just adds significant risk factor looking at the history of currency since the black Friday of 1997.Treasury is on something good on inflation.
The old pensioners who own most houses that have possible commercial use have not been spared by government. Theministry proposed 25 percent tax on properties converted to commercial use. In Harare there are very few houses without a full or partial commercial use and it may be so with other cities. This tax poses a significant decline in personal income of retirees which is unfortunately a group impacted the most by the black Friday of 1997, gononomics, phantom money from 2013 till 2017 and then gedye gedye of Dr Mangundyaof 2019.
There is a good on the proposal that betting, that a lot of people consider addictive and undesirable now attracts 25 percent for winning bonus and 20 percent for bookmarkers. This may increase disposable income in families and prevent use of funds on uncertainties.
Zimbabwe has an issue with monetization of content creators and access to payment platforms. It’s now a potentially huge economic growth platform. However, the fiscal authorities decided to go the other side of town by introducing a digital tax which though levels the playing field for local players it doesn’t create a new economy. It is a tax that will assist their colleagues in ride industry against the likes on Indrive and Bolt.
It is positive that there is tax deduction of up to 150 percent and duty-free imports for sports equipment. The downside of this is that it’s a budget initiative to support cronies we all know are in sports and construction of stadiums. The powerful figures around power will never pay tax for a long time.
Zimbabwe can be a very unusual place. Things remain the same or have gone south for a common man yet for some reason domestic debt has ballooned by nearly US$1 billion in a year. This should cause concern because it causes economic instability. That the government additionally is failing to pay nearly US$1.2 billion to contractors poses going concern challenges to employers which dwindles employment prospects. Related to that is non-payments to the most vulnerable in our society;
Treasury failed and or negated to pay US$98 to Basic Education Assistance Model. Imagine they want to negatively impact school budgets and the pupils when the party running the government has hundreds of millions to purchase cars, buy sapatina, give to socialites and donate millions to members to maintain power whilst increasing poverty. It’s very illogical.
That Professor Mthuli Ncube and his inner team aren’t fit for purpose is simply because they are innovating around the familiar of increasing taxes without more focus on growth of the revenue base.
Brian Sedze is a strategy, innovation and compliance consultant. He is the president of Free Enterprise Initiative, a think and do tank on government policy impacting corporates and other persons