IMTT AND ZIG-ONLY TAX REFORMS: 2026 BUSINESS COSTS

A finance manager approves a ZiG supplier run on Monday, then sees a separate charge on every payment confirmation. The immediate question is not whether the 1.5% IMTT rate sounds lower than last year. It is what Intermediated Money Transfer Tax will cost the business after income tax, VAT changes and the currency used to settle each invoice.

For Zimbabwean enterprises, IMTT changed from 1 January 2026. Finance Act 7 of 2025 reduced the rate on local-currency transactions, including ZiG, from 2% to 1.5%, while foreign-currency transactions remain subject to 2% IMTT .

What IMTT means in Zimbabwe

IMTT means Intermediated Money Transfer Tax. A financial institution mediates a taxable money transfer, withholds the tax and remits it to the Zimbabwe Revenue Authority, ZIMRA.

In practice, the charge appears when a business makes a taxable transfer through a bank, mobile-money operator or, from 1 January 2026, a microfinance institution registered or required to register under the Microfinance Act. The business does not generally prepare a separate IMTT return because the intermediary withholds the tax.

The statutory term is Intermediated Money Transfer Tax, or IMTT. We advise finance teams to use that term in board papers, tax reconciliations and contracts, rather than “IMMT tax”, “IMT charges” or “intermediate money transfer tax”. Precision matters when the payment team, auditor and tax adviser need to reconcile the same charge.

The 2026 rates that matter

Calling this a “ZiG-only tax reform” can mislead a board. The 1.5% concession applies to local-currency transactions. A company that pays suppliers, landlords or offshore service providers in foreign currency must still model the 2% IMTT cost.

What the reform actually costs a business

The headline rate is only the starting point. For a profitable company that qualifies to deduct IMTT when calculating taxable income, the cost falls because the deduction reduces taxable income.

At the standard 25% company income-tax rate, a 1.5% ZiG IMTT cost has an indicative after-income-tax cost of 1.125%. A 2% foreign-currency IMTT cost has an indicative after-income-tax cost of 1.5% on the same basis.

This is a deduction, not a refund and not an IMTT credit. The business pays the tax when it transfers funds, then claims the qualifying cost in calculating taxable income, subject to statutory registration and compliance conditions.

Worked example: a ZiG supplier run

Take an illustrative Harare manufacturer that pays ZiG-equivalent supplier invoices of US$100,000 in one month through taxable local-currency transfers. At 1.5%, the gross IMTT cost is US$1,500 in ZiG equivalent, using the prevailing interbank rate for the relevant transactions.

If the manufacturer is profitable, is compliant and can use the deduction at the 25% company income-tax rate, the deduction reduces income tax by an indicative US$375. It’s indicative after-income-tax IMTT cost is therefore US$1,125, or 1.125% of the payment value.

The finance team should not book US$1,125 as the bank charge. The cash leaves at US$1,500 equivalent, and the US$375 benefit only arises through the income-tax calculation. We would separate cash cost from tax effect in the monthly management accounts.

Worked example: a US-dollar procurement payment

Consider an illustrative Bulawayo wholesaler paying a US$40,000 foreign-currency invoice for imported stock. At 2% IMTT, the payment creates a US$800 IMTT cost.

Assuming the wholesaler meets the conditions for deductibility and has taxable profits, the deduction could reduce company income tax by US$200 at 25%. The indicative after-income-tax cost is US$600, or 1.5% of the US$40,000 payment.

The business would do better to forecast this charge before agreeing supplier payment terms. A procurement team that compares only supplier prices can miss an US$800 cash charge on a single settlement.

The important judgement call

If your business makes only occasional low-value local-currency payments, do not build a separate treasury project around IMTT. Add the 1.5% charge to cash-flow forecasts, ensure the accounting system captures it correctly, and review it with the monthly tax reconciliation.

If your business makes frequent US-dollar payments, operates through a microfinance institution, or processes individual ZiG transfers near the US$500,000 equivalent threshold, give IMTT a formal place in treasury controls. The rate difference, the large-transfer rule and the timing of cash outflows can affect pricing and working capital.

Loss-making businesses need particular care. They may record deductible IMTT, but they may not receive an immediate income-tax benefit because they have no taxable profit against which to use the deduction.

The flat charge on large ZiG transfers

A single ZiG transaction equivalent to at least US$500,000 at the prevailing interbank rate attracts flat IMTT equal to US$10,150 in local-currency equivalent. This threshold applies to a single transaction, so treasury staff need to identify it before authorising the payment.

At exactly US$500,000 equivalent, 1.5% would produce US$7,500 equivalent. The flat US$10,150 equivalent charge is therefore material at the threshold, which is why we would ask for a transaction-level review rather than rely on a monthly average.

Do not assume that splitting a payment changes the legal outcome or produces a better tax result. Payment structure depends on the commercial agreement, banking controls and the applicable law. Seek tax advice before changing payment instructions solely to manage IMTT.

IMTT is not the only 2026 payment-cost change

The same 2026 revenue measures increased VAT from 15% to 15.5%, effective 1 January 2026. Registered operators making taxable supplies can generally recover VAT, but the increase still affects cash flow and the cost of purchases where input VAT is not creditable.

A business that reports only a 0.5 percentage-point VAT increase may understate the cash impact of a transaction. It should model the VAT treatment of the supply and the IMTT on the payment separately, because they arise for different reasons.

Take an illustrative VAT-registered distributor buying taxable local supplies worth US$100,000 before VAT, paid in ZiG equivalent. The move from 15% to 15.5% increases the VAT on that invoice from US$15,000 to US$15,500, a US$500 cash-flow difference, before considering the 1.5% IMTT on the taxable payment.

If the distributor can recover the input VAT, the US$500 may not remain a final cost. The 1.5% IMTT follows a different path: it is deductible for qualifying taxpayers, rather than recoverable as a VAT input credit.

This distinction is often missed in pricing meetings. The commercial team may treat both taxes as margins lost, while the finance team needs to distinguish recoverable VAT, deductible IMTT and unrecoverable cash costs.

What finance teams should change now

Update payment and accounting controls

Map each major payment stream by currency: ZiG, US dollar and any other foreign currency. The transaction currency determines whether the 1.5% local-currency rate or 2% foreign-currency rate applies.

Update POS, ERP and pricing systems for the 15.5% VAT rate. A business that continues to calculate VAT at 15% creates errors in invoices, customer pricing and VAT returns.

Create a dedicated IMTT expense line in the chart of accounts. This makes it easier to reconcile bank charges, identify qualifying deductible amounts and prepare the income-tax computation.

Reconcile what the intermediary withheld

Banks, mobile-money operators and qualifying microfinance institutions withhold IMTT. The most common control failure is to assume that every bank charge labelled as a transfer charge is deductible IMTT without matching it to payment evidence.

We recommend retaining the payment instruction, bank or intermediary confirmation, invoice reference, currency and IMTT amount for each material payment. The tax file should show why the business treated the cost as deductible and whether it meets registration and compliance conditions.

Financial institutions must remit IMTT to ZIMRA by the 10th day of the following month. The business ordinarily does not file a separate IMTT return, but it should monitor the amount withheld and use the ZIMRA TaRMS Self-Service Portal for its broader tax compliance obligations.

Check the mid-year position before changing forecasts

As of September 2026, no primary-source evidence was identified of a 2026 mid-term or mid-year budget review changing IMTT after 1 January 2026. Do not treat that absence as a guarantee that no later fiscal announcement will affect your business.

We would keep the Finance Act 7 of 2025 rules in the base forecast, then review formal ZIMRA notices and enacted legislation before revising rates. This is more reliable than modelling from budget commentary or informal rate tables.

Change log: IMTT and related 2026 measures

Frequently Asked Questions

What is IMTT tax in Zimbabwe?

IMTT is Intermediated Money Transfer Tax. A financial institution mediating a taxable money transfer withholds the tax and remits it to ZIMRA.

What is the IMTT rate in Zimbabwe for 2026?

From 1 January 2026, the rate on local-currency transactions, including ZiG, is 1.5%. Foreign-currency transactions remain subject to 2% IMTT.

Does the 1.5% rate mean IMTT applies only to ZiG payments?

No. The reduced 1.5% rate applies to local-currency transactions. Foreign-currency transfers still attract IMTT at 2%, so “ZiG-only tax reforms” is not an accurate description of the full regime.

Can a company recover IMTT from ZIMRA?

Qualifying IMTT is deductible in calculating taxable income, subject to statutory registration and compliance conditions. It is not an IMTT refund or tax credit, and a loss-making business may not obtain an immediate benefit.

Payment taxes affect margins one transfer at a time, then accumulate across a year of supplier settlements, payroll funding and operating costs. Speak With Our Team to review your IMTT treatment, VAT settings and 2026 cash-flow assumptions before the next forecasting cycle.