FINANCIAL services firm IH Securities says the proposed tax changes introduced in last week’s 2026 National Budget point to an “increasingly punitive tax and regulatory environment”.
The budget proposed a slew of new tax reforms while making negligible concessions. The only notable adjustment was to the Intermediated Money Transfer Tax (IMTT), where Treasury reduced the rate for ZiG transactions to 1,5% per transfer, from 2%, while keeping it at 2% for US dollar transfers.
“The government continues to prioritise pivoting to fiscal discipline and measures that close leakages while leveraging high commodity prices,” IH Securities said in its post-2026 National Budget review.
“However, we are seeing a two-edged outcome: business reforms are broadly positive, but the tax environment is less amenable.”
The government is aiming to collect an additional US$1,47 billion in revenue for 2026, targeting total revenues of US$9,4 billion, up from this year’s expected returns of US$7,93 billion.
To achieve this, the budget introduced a raft of new taxes. These include a sliding-scale royalty on gold, a tiered export tax on unprocessed lithium, and a new 15% digital services tax on foreign platforms.
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Furthermore, the standard VAT rate has been raised by half a percentage point to 15,5%, and import duties on cotton have been sharply increased to protect local industry.
IH Securities noted the liberalisation of gold trading should enhance formalisation in the sector, but warned that “the change in the royalty structure could largely impact returns and investment flows for large-scale miners.”
The firm also expressed concerns over the national debt.
“The heavy reliance on short-term external borrowing, much of it denominated in hard currency, leaves Zimbabwe vulnerable to external shocks and exchange rate volatility,” it said.
“The success of the Arrears Clearance and Debt Restructuring Process remains pivotal to restoring external creditworthiness, reducing debt servicing costs, and unlocking concessional financing that is critical for NDS2’s (National Development Strategy 2) capital projects.”
Highlighting fiscal shifts, IH Securities said whilst NDS1 targeted a budget deficit of 1,5% of gross domestic product (GDP), this has been revised to a target of 3% of GDP under NDS2.
“Externally, the current account surplus, strong remittances and mining exports support reserve accumulation, but risks persist from global demand weakness and elevated borrowing costs.”
The firm warned that the “large share of short-term debt and continued reliance on foreign currency obligations heighten refinancing and liquidity pressures”, and cautioned that “the revision of tax holidays may dampen appetite for future syndicated offshore debt and other instruments.”
On inflation, IH Securities said the VAT increase “may somewhat increase inflationary pressures, which might be at odds with the target to reduce the inflation rate to single digits”.
“In our view, in an environment where margins are already under pressure, we assume the former,” it said.