It’s that time of year again. The Zimbabwean Minister of Finance and Economic Development, Professor Mthuli Ncube, walks into Parliament with a briefcase containing the budget proposal for the following year. It is truly all eyes on him. The 2023 Budget Statement Year FINAL speech was delivered towards the end of last week, and as usual, the minister left us with quite a lot to chew. Here we break down the highlights of the 2023 fiscal policy plan.

The minister took some time to get Zimbabweans up to date on the previous budget year, metrics concerned with the 2022 year, and some broad projections for 2023. There’s a lot to go through, but a quick point of interest is a 3.8% growth projection for 2023. Broad money supply recorded an annual growth rate of  425.8% to ZWL$1.9 trillion in September 2022. Then came specific matters of interest, which we will detail below.

Employment costs just over half the budget

The projection is for employment costs to constitute 52.4% of the expenditure plan or ZWL$ 2.2 trillion. To the uninitiated, this may seem a little high, but those well-versed in Zimbabwe’s fiscal policy will recall that the percentage was close to 90% not too many years ago. This may seem like prudence on the part of the government but how it has been achieved is questionable as they continue to hold back on what civil servants feel they deserve to be paid.

Zimbabwe 2023 National Budget Expenditure

Treasury Bond Issue

The government’s plan to issue treasury bonds, the long-term version of treasury bills, will go ahead. The government intends to borrow for infrastructure projects, particularly in road and irrigation. The bonds will be issued in batches or tranches of US$100 million at a time on the Victoria Falls Stock Exchange, which caters for US Dollar denominated securities. The idea is great in principle, but the targets are less so. Irrigation is, without a doubt, a worthy target, while road infrastructure isn’t exactly productive. Of course, it allows accessibility.

Annual Government Borrowing Limit is Set at 5.75% of GDP.

With great confidence, the government borrowing limit has been set to 5.75% of GDP. This will go a long way to containing expenditure by the authority if it is adhered to. This move suggests that the gold coins may be playing their part as access to interest-free funds for the government.

Monetary Policy Brief

The monetary policy will, of course, be delivered by central bank governor Dr John Mangudya towards the end of January; however, the consultation between the two offices has grown stronger, and we have an idea of what the governor will be working towards thanks to the budget speech. A month-on-month inflation target of between 1 and 3% (something we have not seen for a very long time) and a review of the foreign currency surrender requirements are on the cards.

National Venture Capital Company of Zimbabwe

National Venture Capital Company of Zimbabwe (NVCCZ) was established in 2020 and has now been capitalised with ZWL$ 1 billion and will receive a further ZWL$ 4 billion in the 2023 budget. This brings the capital to just under US$8 million at the official exchange rate.


ZimSat-1 successfully launched on November 7 2022. While many claims were made about the benefits of Zimbabwe launching, they were not very detailed. Still, with the satellite now launched and operating, we look forward to seeing the benefits of launching our own satellite into space.

No customs duty on capital equipment

The minister proposed to expand the scrapping of customs duty on capital equipment beyond primary industries, as we have seen in the past. Clearer guidance is sure to come on what qualifies, but for the time being, we can say customs duty has been scrapped on capital expenditure.

Imported dairy products Levy

From 1 January 2022, imported dairy products will be levied with a 5% tax. This will make imported products more expensive and hopefully drive consumer appetites towards locally produced dairy. Zimbabwe’s dairy industry has faced a few challenges which have led to erratic supply on the market and loss of consumer confidence.

VAT increased to 15%

Another tax that hits the consumer, Value Added Tax, also received an increment. From 1 January 2023, VAT will return to its previous level of 15% except for exempt and zero-rated items.


After a long wait, Zimbabwe finally came closer to a listed Real Estate Investment Trust (REIT) with the Tigere REIT IPO. This was supposed to be concluded by the time of writing but received an extension to the deadline. The minister proposed to limit REITs to shopping malls, student accommodations and hotels. This is interesting to narrow the scope of the unproven concept so early on.

Only Fiscal Invoices for VAT

The Ministry of Finance loves VAT and has for years been pursuing fiscalisation strategy. In simple terms, this connects tills or Point of Sale systems of VAT-registered businesses and automatically reports their output VAT (VAT they charge and therefore collect on behalf of ZIMRA). Now the minister has moved to disallow input VAT (VAT businesses are charged and subtracted from their output VAT to arrive at a net VAT position) deductions that are not supported by fiscalised receipts. This will force many businesses to comply or lose customers.

Energy drinks excise duty doubled

Excise duty on energy drinks will be doubled from the current 5 US cents per litre to 10 US cents per litre. This is with effect from 1 January 2023. As he has shown in his tenure, the Minister knows how to follow activity.

Unredeemed Capital allowances

Capital allowances (the depreciation allowable for deduction by ZIMRA) will get a shake-up. The unredeemed (undepreciated) portion of asset value will now be crystalised in foreign currency at the beginning of each year. This brings some sanity to the area plagued with the currency depreciation problem.

IMTT on foreign currency transactions reduced

The ministry felt the sting of a policy decision that increased IMTT on foreign currency transactions as citizens seemed to prefer dealing in cash hence avoiding the IMTT. This takes foreign currency out of the system and exacerbates shortages. The IMTT on foreign currency transactions will be reduced to 2% in a bid to encourage transacting.

Increase in Interest on Tax

Interest on tax was charged at 25% per annum. This will now be equivalent to the bank policy rate of 200% at present. The low interest on tax created a loophole for businesses to delay payment of tax. The minister also proposed to have outstanding tax debts converted to foreign currency equivalents at the time the debt is incurred.

Late submission penalty

For late submission of taxes, the penalty was ZWL$30 per day. That’s less than 5 US cents per day. The penalty will be redenominated to US$30 per day. These are tough times for businesses.

Taxpayers to update details within 30 days

To compel companies to register within 30 days of their company registration, the minister proposed a penalty of US$30 per day (after the initial 30) if a company remains unregistered. The same will apply to updating taxpayer details.

Road Access Fee Dollarised

The road access fee will go up from ZWL$ 10 per vehicle to US$10 per vehicle.

This budget has a lot to digest, but the overarching themes are adjustments to loopholes and soft dollarisation. As the ministry drives towards stability and sustainability.