Beyond the 2%: Zanu PF’s IMTT Resolution and the Politics of Transactional Trust

By Regina Pasipanodya

During Zanu PF’s 22nd National People’s Conference last Saturday, a resolution hinted at a possible change in Zimbabwe’s financial system: the suggested removal of the Intermediated Money Transfer Tax (IMTT).

While the conference held at Mutare Polytechnic in Manicaland Province focused on youth empowerment and infrastructure development, this economic shift could reshape the state’s relationship with its citizens in the digital age.

The IMTT was introduced in October 2018 by Finance Minister Mthuli Ncube and imposed a 2% tax on electronic money transfers.

Promoted as a necessary step to expand the tax base and stabilize public finances, it quickly became a common burden on everyday life.

The tax affected everyone from informal traders to diaspora remitters, often hitting the most vulnerable hardest.

A Tax on the Margins

For many Zimbabweans, the IMTT meant more than just a tax; it symbolized economic hardship.

One anonymous Zanu PF member from Harare said remittances were a heavy burden on ordinary citizens.

Although necessary, as pointed out by Prof. Mthuli, the IMTT had become a new way to exploit regular people. I commend our party’s leadership for recognizing and addressing this issue.

In a country where mobile money and digital transfers are lifelines amidst cash shortages and inflation, taxing these transactions felt unfair.

Civil society groups, economists, and business associations frequently called for its review, highlighting its regressive nature and negative impact on financial inclusion.

“The IMTT penalized the very people it claimed to empower,” said a fintech entrepreneur based in Harare. “It discouraged digital adoption and pushed informal businesses back into cash, hurting transparency and growth.”

The Confederation of Zimbabwe Industries (CZI) and the Zimbabwe National Chamber of Commerce (ZNCC) both identified the tax as a hurdle to competitiveness.

The Monetary Policy Committee acknowledged in its 2024 review that while the IMTT generated significant revenue—over ZWL$100 billion since its start—it also distorted payment behaviors and discouraged formalization.

Mutare’s Message: A Strategic Recalibration

Against this backdrop, Zanu PF’s resolution to eliminate the IMTT seems more like a strategic adjustment than a mere concession.

The party’s economic affairs committee framed this move as part of a broader effort to improve digital growth, restore trust in transactions, and support youth-led businesses.

The Youth League notably backed the resolution, arguing that the IMTT hindered innovation and kept young entrepreneurs out of formal financial systems.

This aligns with Zanu PF’s Vision 2030 agenda, which focuses on inclusive growth, digital change, and economic independence.

By removing the IMTT, the party shows a readiness to rethink its revenue strategies for long-term benefits.

Diaspora Dynamics: Cost of Sending Money Home

The IMTT’s effects reached beyond Zimbabwe.

For millions living abroad, sending money home became costlier and less clear.

Remittances, estimated at over US$1.5 billion a year, are essential for families and communities.

However, the tax complicated formal channels and pushed many towards informal options and unregulated platforms.

Zanu PF’s UK District previously called for scrapping the IMTT on diaspora remittances, highlighting its negative impact on formal engagement.

The resolution in Mutare echoes this call, potentially leading to more transparent, secure, and accountable remittance systems.

Revenue vs Reform

Although the political message around removing the IMTT is clear, the financial consequences are complex.

The tax has been a steady source of revenue, especially with limited borrowing and donor support.

Its removal raises concerns about how the government will fill the financial gap.

Economist Dr. Prosper Chitambara warns that without new revenue sources, this decision could increase the budget deficit.

“We need a clear plan that balances change with sustainability,” he said. “This involves expanding the tax base, improving compliance, and investing in digital systems.”

Some analysts believe that removing the IMTT could boost growth and widen the tax base over time. By promoting digital transactions and financial inclusion, the government could discover new revenue sources, even if they take time to develop.

At its heart, the IMTT debate goes beyond economics; it’s about trust.

In a country where policy changes often seem sudden and unclear, removing a tax that affected everyone could mark a new way of engaging with citizens.

It offers a chance to rethink the social contract, making fiscal policy not just about extracting resources, but about empowering people.

The resolution also raises broader questions about Zimbabwe’s digital economy strategy.

Will the government invest in better payment systems, cybersecurity, and digital education?

Will it support fintech innovation and protect citizens’ rights?

The answers will determine if the IMTT’s removal is just a tactical decision or part of a larger transformation.

Beyond the 2%

As Zimbabwe works on its post-pandemic recovery and prepares for upcoming elections, the IMTT resolution provides insight into the changing politics of economic governance.

It shows a growing understanding that trust in transactions is essential not just for business, but for citizenship.

Zanu PF’s choice to eliminate the IMTT may stem from practicality, popular demand, or belief.

Yet for millions of Zimbabweans, it marks a rare moment when policy matches real-life experiences.

The challenge now is to make sure this connection lasts and that the digital economy becomes a place of empowerment, not exclusion.