PARLIAMENT passed the 2026 National Budget after Treasury made several concessions on key fiscal measures, paving the way for the implementation of Government’s spending and revenue plans for the coming year.
The Budget was approved after both the Finance Amendment Bill and the Appropriation Bill were read for the third time in the National Assembly and the Senate, which sat into the early hours of Wednesday to conclude deliberations.
The two Bills now await assent by President Mnangagwa.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube presented the Budget last month, outlining a mix of revenue-enhancing and expenditure measures aimed at stabilising the economy and supporting growth.
The Finance Amendment Bill gives legal effect to the fiscal policy measures announced in the Budget, while the Appropriation Bill authorises expenditure votes for Ministries and Government departments.
Debate was protracted, with legislators raising concerns and proposing amendments, some of which prompted concessions from Treasury.
Dzivaresekwa legislator Mr Edwin Mushoriwa and his Kuwadzana counterpart Mr Chalton Hwende were among backbenchers who tabled proposed amendments to the Finance Amendment Bill, although these were rejected after debate.
One of Mr Mushoriwa’s proposals sought to ring-fence revenue from the sugar tax exclusively for the health sector, as originally envisaged when the levy was introduced.
Prof Ncube opposed the amendment, arguing that there had been no diversion of the funds to other uses and that additional legal safeguards were therefore, unnecessary.
During the debate, the Finance Minister agreed to adjust allocations for several institutions, including Parliament, whose vote he said would be increased by an additional ZiG800 million, from ZiG3 billion.
He also reversed his proposal to double the gold royalty rate to 10 percent after legislators warned that the increase would negatively affect miners and the broader industry.
The royalty rate will now remain at five percent for gold prices ranging between US$1 200 and US$5 000.
Prof Ncube further withdrew his proposal to introduce a cash withdrawal levy following concerns that the measure would overburden formally employed citizens and undermine efforts to formalise the economy.
He acknowledged calls from lawmakers to review foreign currency withdrawal charges and to protect diaspora remittances and small to medium enterprises by suspending the levy below a substantial threshold.
“My other proposal would be to review the foreign currency withdrawal levy . . . and to suspend its application on withdrawals below a substantial threshold to protect diaspora remittances and SME cash flows.
“I also want to recommend that we amend the presumptive tax framework and index the threshold to inflation, raising it from ZiG5 000 to at least ZiG10 000 monthly return,” said Prof Ncube.
Addressing criticism over the decision to increase Value Added Tax (VAT) by 0,5 percentage points from 15 percent, the Finance Minister said the measure would not harm low-income earners, as most basic commodities consumed by poorer households are zero-rated or exempt from VAT.
He cited items such as bread, cooking oil, salt, milk, sugar, vegetables, fruits, maize meal, wheat flour, sanitary products and agricultural inputs among goods that do not attract VAT.
Prof Ncube also defended the increase by comparing Zimbabwe’s VAT rate with those of other countries in the region, noting that several peers have higher rates.
He said VAT stands at 20 percent in Madagascar, 18 percent in Tanzania, 17 percent in Mozambique, 16,5 percent in Malawi, and 16 percent in both the Democratic Republic of Congo and Zambia, while Zimbabwe’s new rate of 15,5 percent remains within the regional range.
The 2026 National Budget projects total expenditure of ZiG290 billion, equivalent to about US$9,5 billion or 17 percent of gross domestic product (GDP).
This is set against a revenue target of ZiG288 billion, or about US$9,4 billion, representing 16,9 percent of GDP.
However, Prof Ncube said the operational framework presented to Parliament on November 27, 2025, is based on a more conservative total revenue target of ZiG275,7 billion, or US$9 billion, equivalent to 16,2 percent of GDP.
He said the figures would be reviewed in the second half of the year once revenue performance stabilises. – Herald
