Mthuli Ncube Forced To Scrap USD Cash Withdrawal Tax- iHarare News

Zimbabwe’s Finance Minister, Professor Mthuli Ncube, has been forced into a dramatic climbdown, completely scrapping a proposed tax on United States dollar cash withdrawals. The sudden reversal, announced on Wednesday, 18 December 2025, comes just three weeks after the levy was announced.

Minister Ncube announced the wholesale repeal of the measure during a marathon parliamentary session, directly citing the intense criticism from lawmakers and citizens alike. The proposed tiered tax on USD cash withdrawals, introduced in his 2026 National Budget on 27 November 2025, has been withdrawn.

A Surrender To Public Fury

The finance minister stood in the National Assembly and acknowledged the overwhelming opposition that had mounted since the budget announcement. He stated that the Treasury had been listening to the furious debate.

“I have listened to the argument. Treasury has been listening,” Professor Ncube told the House. He further conceded that the proposed levy risked becoming a major deterrent to using the formal banking system. In a definitive move, he declared, “I have listened closely to the debate from Honourable Members and the public regarding the cash withdrawal levy proposals. Therefore, I hereby propose that we repeal that whole Clause 7.”

This policy U-turn marks a significant victory for public sentiment and parliamentary pressure over the Treasury’s initial plans. The tax would have applied a charge of 2% on individual monthly USD cash withdrawals over US$500 (approx. ZAR 9,500), with higher rates for corporate entities.

The Backlash That Forced The Hand

The minister’s hand was decisively forced by an immediate and vocal uprising from economists, political figures, and ordinary Zimbabweans. The outcry played out prominently on social media and in news analyses, arguing the tax would cripple ordinary citizens and push the economy further into informality.

Prominent lawyer and politician Fadzayi Mahere captured the mood of disbelief on 27 November 2025, challenging the policy’s fundamental logic on X. She wrote:

“Why are you introducing a tax for withdrawing cash when bank charges are already so extortionate? Can you not see that you’re going to disincentivise use of the banking system?”

Economist Professor Gift Mugano also voiced severe criticism, highlighting a contradiction with earlier government promises to reduce banking costs. Following the minister’s reversal, Professor Mugano praised the government’s responsiveness in a post on 18 December 2025.

“Thumps up to @ZimTreasury for taking heed of our submissions on the 2026 budget,” he stated, confirming the tax’s removal. He added, “This is a clear demonstration of being a listening Government.”

What The Scrapping Means For You

The immediate effect of the repeal is that Zimbabweans can access their US dollar savings from banks without the threat of an additional withdrawal tax. The swift demise of the policy spares citizens from a new layer of cost on top of existing bank charges and the 2% Intermediate Money Transfer Tax (IMTT), which remains in place.

The government’s stated goal of encouraging digital transactions now continues without what the public successfully argued was a counterproductive financial penalty.