Mthuli Ncube introduces tax incentives to boost 24-hour economy

The government has unveiled a series of tax measures aimed at boosting industrial output, enhancing productivity, and encouraging a shift towards a 24-hour manufacturing economy, as part of the 2026 National Budget presented in Parliament on Thursday by Finance Minister Professor Mthuli Ncube.

Minister Ncube said the initiatives are designed to provide fiscal support to key manufacturing sectors, reduce input costs, and maximise the utilisation of capital infrastructure. A central feature of the budget is the proposal to introduce targeted tax incentives for firms that adopt extended or round-the-clock production cycles, addressing the current constraint of limited operating hours which the Ministry sees as a barrier to GDP growth and job creation.

"Mr Speaker Sir, the current tax legislation does not provide specific incentives for firms that operate extended or round-the-clock production cycles. Limited operating hours in key sectors such as manufacturing constrain overall industrial output, employment generation, and GDP growth," Minister Ncube said.

The proposed incentives, which are currently under discussion with stakeholders, include additional tax deductions on selected expenditures incurred during extended operational hours, accelerated wear-and-tear allowances on plant and equipment used in continuous production, and priority access to import duty concessions for companies demonstrating capacity expansion under the 24-hour model. The measures are intended to mitigate challenges such as energy and security concerns, making continuous operations more economically viable.

In a separate move, Minister Ncube announced the removal of customs duty on critical raw materials used in the manufacture of gas cylinders. The measure targets imported materials including steel coils and plates and is intended to reduce production costs, stimulate local manufacturing, and create a level playing field between imported and locally manufactured products.

The budget also proposes adjustments to the customs duty regime for the textile sector. To support local fabric production and strengthen the domestic cotton-to-clothing value chain, the Minister proposed aligning the customs duty on selected polyester staple fibres with dyed woven cotton fabrics, setting a combined rate of 40 percent plus US$2.50 per kilogram.

Finally, reinforcing the government's commitment to the manufacturing sector, ZiG459.8 million has been ring-fenced under the Ministry of Industry and Commerce to support tooling, working capital requirements, and improvements in the overall policy environment. The measures form part of a broader strategy to modernise Zimbabwe's industrial base and encourage investment in continuous production to drive economic growth.