Zimbabwe has enacted the Finance Act and Appropriation Act for 2026, formalising key tax and spending measures from the 2026 National Budget, including targeted incentives for outsourcing services, adjustments to VAT and transaction taxes, revised gold royalty structures, and customs duty reforms to support local industry and economic growth.
Zimbabwe’s President has formally approved both the Finance Act and the Appropriation Act, giving legal effect to the measures outlined in the 2026 National Budget. Together, these laws implement the government’s fiscal and tax policy agenda for the 2026 financial year.
The Finance Act brings into force a range of tax changes proposed in the 2026 budget, including amendments. The Appropriation Act authorises government spending for 2026.
The President gave assent to the Finance Act on 29 December 2025, with all approved tax measures taking effect from 1 January 2026.
One key measure of the Finance Act is the government’s decision to maintain the gold royalty rate at 5%, reversing its earlier plan to double it to 10%. It also abandoned the proposed cash withdrawal levy. The aim is to harmonise and review gold royalty rates to ensure fair revenue contribution from the mining sector.
The proposed structure introduces a sliding scale based on gold prices, with rates of 3% for prices up to USD 1,200 per ounce, 5% for prices between USD 1,201 and USD 2,500 per ounce, and 10% for prices at or above USD 2,501 per ounce.
Other key measures include:
Incentives for outsourcing services
The government has introduced a package of incentives to support Business and Knowledge Process Outsourcing (BKPO) operators, to increase foreign currency inflows and job creation. Qualifying operators will benefit from a reduced corporate tax rate of 15%, along with additional concessions, including a full capital allowance in the first year of use.
VAT rate increases
The government has proposed a marginal increase in the value added tax (VAT) rate from 15% to 15.5%, effective from 1 January 2026.
Review of intermediated money transfer tax (IMTT)
The tax rate on local-currency ZiG-denominated transactions will be reduced from 2% to 1.5%, while the 2% rate on foreign-currency transactions will remain unchanged.
Digital services withholding tax
A new digital services withholding tax (DSWT) is proposed for 2026. This tax will apply to payments made to offshore digital platforms and will be charged in place of VAT on imported digital services.
Customs duty rationalisation
The government is revising customs duties to support local manufacturing and enhance domestic value chains. The changes include increasing duties on selected polyester staple fibres to match those on dyed woven cotton fabrics, while removing customs duties on key imported raw materials, such as steel coils and plates, to reduce production costs and boost local gas cylinder manufacturing.
Earlier, Zimbabwe’s Ministry of Finance, Economic Development, and Investment Promotion (MoFEDIP) presented the 2026 national budget to the Parliament on 27 November 2025.
