Banks Demand Scrapping of IMTT Tax Ahead of Budget Review

Zimbabwe’s banking sector urged Finance Minister Mthuli Ncube to abolish the Intermediated Money Transfer Tax, arguing the levy is hurting businesses and discouraging digital payments, iHarare reported. The call comes ahead of the Mid-Term Budget Review expected in July 2026, setting up a clash over fiscal policy. Bankers say the 2% tax has driven transactions into the informal sector, eroding the formal financial system and reducing overall tax compliance. The pushback intensifies pressure on Ncube, who has relied on IMTT as a key revenue stream amid a cash-strapped economy and mounting public debt. The core vulnerability is the government’s dependence on transaction taxes that undermine the very formalization it seeks to achieve, trapping the economy in a low-compliance equilibrium.