Mthuli Ncube reduces IMTT again

The Government is considering a further reduction in the Intermediated Money Transfer Tax (IMTT) as it explores alternative revenue sources to compensate for any resulting shortfall.

Finance Minister Mthuli Ncube said the proposed reduction was under consideration, following an earlier cut in the tax on local currency transactions.

Speaking at the 23rd ZANU PF Annual National People's Conference in Chinhoyi last week, Ncube said the IMTT rate on Zimbabwe Gold (ZiG)-denominated payments was reduced from 2% to 1.5% in January 2026, while transactions conducted in foreign currency continued to attract a 2% rate.

"Bank charges were reduced, and banks have fully complied," he said.

"IMTT was reduced for ZiG payments from 2 per cent to 1.5 per cent. The tax deductibility implies that the effective tax rate on corporates is lower than 1.5 per cent and 2 per cent on local currency and foreign currency transactions, respectively.

"Currently, consideration is in progress to further reduce IMTT while identifying alternative revenue sources that can close the revenue gap."

A further reduction could lower the cost of electronic payments for individuals and businesses, although the extent of any relief would depend on the final rate and the transactions affected.

According to Treasury, more than 70% of revenue collected through IMTT has been channelled towards infrastructure development, healthcare, education and social safety nets.

The tax has been an important source of government revenue, meaning any further reduction would require alternative funding measures to avoid widening the fiscal gap.

Ncube also said the Financial Intelligence Unit (FIU) would continue monitoring financial transactions to identify and curb illicit activities, including illegal foreign currency dealing and corruption.

"The FIU has continued to carry out monitoring and analysis of financial transactions to identify illicit transactions, including illegal dealing in currency, corruption and other illicit transactions," he said.

He added that government contractors and other beneficiaries of public payments were being monitored and engaged to discourage them from diverting funds to the parallel foreign exchange market.

Ncube further disclosed that 13 companies had been penalised for illegal foreign currency dealing between April and June 2026 following information supplied by a whistleblower to the FIU.

The proposed IMTT reduction signals the Government's intention to review the cost of electronic transactions while maintaining revenue collection and strengthening oversight of financial flows. However, no revised rate or implementation date has yet been announced in the information provided.