Employers are advocating for the removal of the Intermediated Money Transfer Tax (IMTT), stating that it has become a significant burden on legitimate businesses, fueling the expansion of an increasingly informal economy in Zimbabwe.
This follows a day in which the Zimbabwe National Statistics Agency reported that the informal sector has expanded significantly by at least 16 percentage points to 76.1%, as more companies move into the shadows because of excessive taxation, bureaucratic hurdles, and policy instability.
The Treasury launched the IMTT to impose taxes on the informal sector, which averages US$38.9 million in daily transactions, according to central bank data, primarily via mobile money services.
In 2024, the Ministry of Finance, Economic Development and Investment Promotion set the IMTT at 2% for both United States dollar and Zimbabwe Gold (ZiG) transactions, increasing from 1% previously.
Nevertheless, the expected impact of the IMTT has merely imposed an additional tax on formal companies, as informal businesses started conducting more cash-based transactions.
At the Employers Confederation of Zimbabwe (Emcoz) 2025 conference on Thursday, with the theme 'Negotiating Resilient Collective Bargaining Agreements,' Emcoz vice president Farai Dube urged the abolition of the IMTT.
"Initially, we need to eliminate the tax rate as it doesn't provide any benefit. This should be adjusted by streamlining regulatory charges. It will make space for what the Treasury and business owners require…The IMTT should be removed," he stated, representing Emcoz president Demos Mbauya.
It discourages the use of electronic payment systems, which are essential for improving financial inclusion and minimizing transaction inefficiencies.
The increase in mobile money transfers occurs alongside 15,893,626 active mobile subscriptions as of March.
Dube stated that the IMTT had not fulfilled its role and encouraged informal businesses to rely on cash transactions.
"The IMTT aimed to bring informal businesses into the formal sector, but this has not happened as most informal businesses use tax evasion, and the tax impacts formal companies more than informal ones," he said.
Dube mentioned that the 2025 Monetary Policy Statement, an annual policy publication by the Reserve Bank of Zimbabwe, had drawn limited business engagement.
"After the release of the 2025 Monetary Policy, we have observed numerous activities, some of which are considered significant. Businesses are still facing inflationary risks, and exchange rate imbalances are creating many issues," he stated.
Businesses have found planning challenging in the present unpredictable environment. Therefore, we must address the money supply by implementing a strict monetary policy to stabilize the exchange rate and prices.
He mentioned that Emcoz was developing a cooperative agreement aimed at fostering a favorable and efficient workplace.
"We are of the opinion that the strength of collective bargaining agreements must focus on equity, openness, and public dialogue. We are dedicated to cooperating with unions to find outcomes that satisfy everyone," Dube stated.
Economist and researcher Prosper Chitambara stated that excessive taxation has become a challenge for many businesses, necessitating a thorough review of certain tax categories.