Government has proposed tax measures aimed at boosting industrial output, enhancing productivity and fostering a move towards a 24-hour manufacturing economy.
The measures are part of the 2026 National Budget, presented in Parliament on Thursday by the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube.
According to Minister Ncube, Government is focussed on providing fiscal support to key manufacturing sectors, lowering input costs, and maximising the utilisation of capital infrastructure.
A major highlight is the proposal to introduce targeted tax incentives for manufacturing firms that adopt extended or round-the-clock production cycles. This move addresses the existing constraint of limited operating hours, which the Ministry views as a bottleneck to GDP growth and job creation.
Minister Ncube highlighted the urgency, stating: “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.”
The proposed incentives, which are currently under discussion with stakeholders, will include additional tax deductions on selected expenditure 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.
This initiative seeks to counter key barriers to extended operations, such as energy and security concerns, making the shift to 24-hour operations more economically viable.
In a separate move to lower production costs and support import substitution, the Minister also announced the removal of customs duty on critical raw materials used in the manufacture of gas cylinders.
This measure, which targets selected imported raw materials including steel coils and plates, is intended to “reduce the cost of producing gas cylinders, thereby stimulating local production, levelling the playing field between imported and locally manufactured products.”
Furthermore, the budget proposes a structural adjustment to the customs duty regime for textiles.
To support the local production of fabrics and enhance the domestic cotton-to-clothing value chain, Minister Ncube proposed to align the customs duty rate on selected polyester staple fibres with dyed woven fabrics of cotton, setting a combined rate of 40 percent + US$2,50 per kg.
Finally, reinforcing the Government’s commitment to the 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 for the manufacturing industry.
