New Tax Regime Takes Effect After Parliament Approves 2026 Budget

Zimbabwe’s new tax regime takes effect after approval of the 2026 Budget, introducing changes to VAT, gaming taxes, mining royalties, digital services tax and other levies (image source)

A new set of taxes and adjustments to existing levies will come into force from midnight following Parliament’s approval of the 2026 National Budget, marking a significant shift in Zimbabwe’s fiscal framework as Government moves to strengthen revenue mobilisation.

The measures, which take effect on Thursday, include both economy-wide adjustments and sector-specific taxes. Among the key changes, the Intermediated Money Transfer Tax (IMTT) on local-currency transactions has been reduced from 2.0 percent to 1.5 percent. Treasury says the cut is intended to lower the cost of digital transactions while maintaining revenue collection from electronic payments.

The gaming and betting sector faces one of the most substantial overhauls. Operators will now be taxed at 20 percent of gross monthly takings, while winnings earned by punters will attract a 25 percent tax. Government officials say the structure is designed to capture a larger share of revenue from the fast-growing gaming industry, though operators have warned that excessive taxation could drive activity into informal or unregulated markets if enforcement does not improve.

In the extractive sector, a new 3 percent coal levy has been introduced as part of efforts to broaden the tax base across natural resources. Gold producers will move to a sliding royalty scale linked to international prices, with royalties set at 3 percent when prices are below US$1,200 per ounce, 5 percent when prices range between US$1,200 and US$2,500 per ounce, and 10 percent when prices exceed US$2,500 per ounce. Authorities say the structure is intended to cushion miners during low-price cycles while allowing the State to capture higher returns during commodity booms.

Changes have also been introduced in the property and consumption space. Property owners leasing premises to businesses will be subject to presumptive rental income tax at 15 percent of rentals paid by tenants operating commercial activities. Value Added Tax (VAT) has been increased from 15 percent to 15.5 percent, while a 15 percent Digital Services Tax will now apply to e-commerce transactions, reflecting Government’s intention to more effectively tax digital economic activity.

Treasury officials described the package as a calibrated approach aimed at supporting priority programmes under the National Development Strategy while maintaining macroeconomic stability. They said some measures, such as the IMTT reduction, were designed to balance revenue needs with the cost of doing business.

Reactions from stakeholders were mixed. Business associations raised concerns that the presumptive rental tax could increase costs for small and medium enterprises. Mining industry players welcomed the price-sensitive gold royalty system but called for clarity on implementation. Gaming operators indicated they would seek further engagement on compliance requirements and the potential impact on employment and investment.

Tax analysts said the VAT increase and the introduction of a digital services tax are likely to broaden the tax base, but warned that effective administration, enforcement and taxpayer compliance will be critical to achieving projected revenue targets. They also urged Government to demonstrate transparency in how additional revenue will be used to improve public services and infrastructure.

As the new tax regime takes effect, businesses and individuals have been advised to review their tax positions and engage the Zimbabwe Revenue Authority for guidance on compliance and implementation details.