Mthuli Ncube proposes trade-off: Cut IMTT, raise VAT

Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, has proposed a balancing act in the country's fiscal framework - suggesting a half-percent reduction in the Intermediated Money Transfer Tax (IMTT), to be offset by an equivalent increase in Value Added Tax (VAT).

Speaking at the ongoing 2026 Pre-Budget Seminar in Bulawayo, Professor Ncube acknowledged widespread calls for a reduction in the IMTT, which many businesses and citizens have argued stifles transactions and financial inclusion. However, he cautioned that the levy remains a vital source of funding for key national programmes.

"The IMTT has played a pivotal role in financing major infrastructure projects as well as the procurement of COVID-19 vaccines during the pandemic," said Professor Ncube.

"We can reduce IMTT by half a percent, but provided to allow us to increase VAT by half a percent," he told delegates. "You don't have to respond now - you can tell me afterwards how you feel. But we need that revenue, or else we cannot function."

The proposal, which effectively aims to maintain revenue neutrality while easing pressure on electronic transactions, is expected to generate robust debate among legislators, economists, and business leaders.

Analysts say the move reflects Government's efforts to strike a delicate balance between stimulating economic activity and ensuring fiscal sustainability amid ongoing macroeconomic reforms.

The Pre-Budget Seminar, attended by Cabinet ministers, parliamentarians, and economic experts, is part of the annual consultative process leading up to the presentation of the 2026 National Budget.