It is not very often that the Zanu PF government changes its position on a matter after feedback from citizens and for that reason we want to applaud Finance minister Mthuli Ncube for his handling of the 2026 budget.
Ncube proposed a number of contentious issues in his budget, which was presented before Parliament in November such as introducing a cash withdrawal levy.
He also indicated his intention to double the gold royalty rate to 10%, which saw large scale miners warning that the proposed hike would seriously impact their profitability.
After a late night debate in the National Assembly last Wednesday, Ncube told lawmakers that he had abandoned plans to introduce the cash withdrawal levy.
He conceded that the proposed tax risked discouraging Zimbabweans from depositing money in banks.
Ncube said he had listened to the debate from MPs and the public, which led him to propose the repealing of Clause 7 regarding the cash withdrawal levy proposals.
He said the repeal was necessary to ensure that the measure does not become “a big penalty” that would drive citizens away from the formal banking system.
Ncube also said he had been persuaded by presentations from MPs, gold mining companies and federations to keep the royalty rate at 5% for gold prices between US$ 1 200 and US$5 0000.
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In his initial budget speech, he had proposed doubling the gold royalty rate to 10% for gold sold about US$2 501 an ounce. Following the revision, 10% royalty rate would now only apply if the bullion price topped $5,000 an ounce.
Small-scale miners would continue to pay lower royalty rates of up to 2%, Ncube told lawmakers. Caledonia, one of the biggest gold mining companies in Zimbabwe which operates Blanket Mine in Matabeleland South, had warned that the royalty increase would undermine its plans to develop the US$500 million Bilboes project near Bulawayo.
The Bilboes project is expected to be Zimbabwe’s biggest mine when it is complete. Mining federations had also warned that the royalty will worsen the smuggling of gold as small players would find it easier to sell the precious mineral outside the country.
For once the government through Ncube listened to the voice of reason on both the cash withdrawal levy and the gold royalties.
We hope that the Finance ministry drew the necessary lessons on the importance of consultation in the budget formulation process and that it is not just a ritual.
