Finance Minister, Mthuli Ncube has announced the repeal of the proposed foreign currency cash withdrawal tax.
The decision came during a marathon parliamentary session that ran into the early hours of Wednesday, following strong lobbying from lawmakers and the public.
Critics had warned that the new tax would “strangle” ordinary citizens and push the economy further into the informal sector.
The reversal occurred during debates on the Finance Bill for the 2026 National Budget, with the controversial clause removed entirely. The tax was announced on 27 November 2025 during the Minister’s budget presentation.
Stakeholders argued that the levy would discourage the use of formal banking channels, burden low-income earners, and drive more transactions into the informal economy.
The Finance Bill had originally proposed a tiered tax on foreign currency withdrawals, which the Treasury said was intended to curb money laundering and encourage electronic transactions.
However, MPs in the National Assembly opposed it, pointing out that it would unfairly penalise civil servants and low-income earners who rely on cash for daily needs.
Ncube admitted the levy risked becoming a “big penalty” that might deter citizens from using formal banking systems.
He therefore moved to repeal Clause 7 of the Finance Bill, scrapping the planned withdrawal tax entirely.
“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. I thank you.”
The Minister had proposed a tiered withdrawal fee. For individuals, a 2% charge would have applied to monthly withdrawals between US$501 and US$1,000, while companies would have faced the same 2% fee on withdrawals of US$5,001 to US$10,000 per month.
For higher amounts, the fee would have increased to 3%, applying to individuals withdrawing over US$1,001 monthly and companies withdrawing more than US$10,001.
Withdrawals of US$0 to US$500 for individuals would not have been subject to any fee.
