HARARE – Several new taxes came into force on January 1, 2026, following the enactment of Finance Act Number 7 of 2025, which gives legal effect to measures announced in the 2026 National Budget, The Sunday Mail reports.
The new tax measures span consumption, exports, digital services, mining and capital transactions, and are expected to boost Treasury inflows, strengthen compliance and align Zimbabwe’s tax system with changing economic conditions.
According to The Sunday Mail, the legislation reflects Government’s broader strategy to widen the tax base, promote value addition and improve domestic resource mobilisation, while providing targeted relief to strategic sectors such as agriculture, health, mining and outsourcing services.
While some of the measures are likely to increase indirect costs for consumers and businesses, authorities say the reforms are necessary to support public finances, fund social services, expand infrastructure and sustain economic development.
One of the most notable changes is the increase in the standard Value Added Tax (VAT) rate from 15 percent to 15,5 percent. Given VAT’s wide consumption base, the adjustment is expected to generate additional revenue for Government.
In an analysis cited by The Sunday Mail, FBC Holdings said the increase would help offset revenue forgone through growth-oriented concessions, such as the reduction in the Intermediated Money Transfer Tax (IMTT).
“An increase in the standard VAT rate provides Government with additional revenue, which is crucial for funding essential public services,” FBC Holdings said. “However, the measure may trigger upward price reviews, exert inflationary pressure and erode household disposable incomes, while raising operating costs for businesses.”
As part of the VAT reforms, zero-rating for services provided by tourist-designated facilities, accommodation to non-residents and hunting safari services has been removed, bringing these activities into the standard VAT net. The move is expected to raise additional revenue from the tourism sector.
Tourism operators have, however, appealed for a review, warning that the sudden policy shift could disrupt confirmed international bookings for 2026.
Tourism Business Council of Zimbabwe president Mr Clive Chinwada said the industry operates on long booking cycles. “In destinations like Victoria Falls, bookings are often made one to two years in advance. It becomes difficult to revisit rates already agreed with international clients and intermediaries,” he said.
On the relief side, VAT exemptions for agricultural goods and services, medical supplies and rural electrification projects funded through the Rural Electrification Fund have been aligned in law, shielding critical social sectors from higher costs.
Mining companies planning investments of US$100 million or more may now register for VAT at the project set-up stage, easing cash-flow pressures during development.
To promote use of the local currency, authorities reduced the IMTT on ZiG-denominated transactions from 2 percent to 1,5 percent, while maintaining the 2 percent rate on United States dollar transactions.
FBC Holdings said the differential pricing was intended to incentivise the use of the local currency. “Reducing the rate for ZiG transactions creates a financial incentive that directly supports monetary policy objectives,” the firm said, adding that retaining the higher rate on USD transfers preserved a key revenue stream.
Professional advisory firm Lucent Consultancy noted that companies involved in large capital movements would face predictable, fixed tax costs, requiring careful cash-flow planning.
To tap into the expanding digital economy, Government introduced a 15 percent Digital Services Withholding Tax (DSWT), applied at the point of payment to foreign suppliers of digital services and electronically delivered intangible goods.
Clarifying the measure, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the DSWT was not a new tax, but an administrative mechanism to improve VAT collection on imported digital services.
“It shifts the point of collection to regulated payment intermediaries, such as banks and mobile money operators, ensuring efficient and consistent collection at source,” he said.
Finance Act Number 7 of 2025 also requires all export taxes to be payable in foreign currency, supporting foreign exchange inflows.
A tiered export tax on lithium has been introduced, with a 10 percent levy on ore and concentrates and zero percent on lithium sulphate, underscoring Government’s push for local beneficiation. Other new export taxes include a 10 percent levy on antimony and related products, a 10 percent tax on unbeneficiated chrome, and revised black granite export taxes based on the value of cut and polished stone rather than raw exports.
In addition, a 3 percent levy on the gross value of sales or exports of coal, lithium, black granite, quarry stone and dimensional stone has been introduced, with coal newly included as a taxable commodity.
On capital transactions, the disposal of shares or interests in land-holding entities is now subject to a special capital gains tax, closing a long-standing avoidance loophole. However, disposals of shares in state-owned or controlled entities may be exempt, at the discretion of the responsible minister.
Significant incentives were introduced for Business and Knowledge Process Outsourcing (BKPO) firms. Companies in the sector now qualify for a tax credit of US$1 500 per additional employee per year, capped at US$60 000, a 100 percent capital expenditure deduction and a preferential corporate tax rate of 15 percent.
Lucent Consultancy said the incentives were designed to attract international firms and position Zimbabwe as a competitive outsourcing hub, creating jobs and expanding the formal employment base.
Several targeted exemptions were retained, including income tax exemptions for Mutapa Investment Fund from January 1, 2025, and toll revenue exemptions for Infralink’s Plumtree–Mutare road, provided funds are used solely for maintenance. Income earned by Real Estate Investment Trusts created from pooled pension funds has also been exempted.
Gold royalties have been harmonised into a sliding scale of 3 percent, 5 percent and 10 percent for miners other than small-scale operators. Commenting on the reforms, Bankers Association of Zimbabwe president Ms Sibongile Moyo said high royalties and limited capital allowances had historically constrained large-scale mine development.
Further changes include shifting several sectors from presumptive tax to self-assessment, including public service buses, large commuter omnibuses, haulage trucks and commercial water vessels. Property owners renting out business premises are now required to register for a presumptive rental income tax of 15 percent of gross rental income.
In the gaming sector, Gaming Operators Tax has been set at 20 percent of gross monthly takings, while tax on punters’ winnings has increased to 25 percent, significantly boosting revenue from gambling activities.
According to The Sunday Mail, while citizens and businesses may experience short-term adjustments through sector-specific price changes, Government expects the reforms to deliver longer-term benefits through stronger public finances, improved infrastructure, job creation and enhanced public services.
