Treasury to prioritize ZiG in tax payments

Mthuli Ncube | Blavatnik School of Government

Philemon Jambaya

Zim Now Editor

The Zimbabwean government is planning to make most taxes and fees payable exclusively in the Zimbabwe Gold currency as part of its efforts to boost demand for the local currency and drive up its value.

Finance Minister Mthuli Ncube announced the plans during a dialogue with development partners in Harare. He stated that the government aims to require taxpayers to settle a significant portion of their obligations in local currency, including customs duties and other taxes.

The decision comes amid concerns about the volatility of the ZiG currency, which was introduced in April as a stable alternative to the US dollar. While the ZiG is backed by foreign reserves, its value has fluctuated since its launch.

To further support the local currency, the government will also restructure debt terms and conditions and issue long-term securities to reduce the cost of debt servicing. Additionally, fiscal outlays will prioritize critical economic enablers and social programs that benefit the poor.

However, economists have warned that the volatile nature of the ZiG could add budgetary pressures as the cost of living continues to rise. The government acknowledges the challenges but remains committed to maintaining a sustainable budget deficit and aligning expenditure to available resources.

Debt remains a significant burden on the government, with a total debt of US$21 billion.