• Taxes create recurring, non-optional demand, which is why Treasury is using them. Customs duty already settles in ZiG, and corporate income tax runs on a 50:50 split for firms earning above half their revenue in foreign currency.
• The exchange rate has held near 26.2 to the dollar through 2026 on a policy rate of 35 percent and reserves of about US$1.3 billion, roughly twice ZiG deposits. Demand manufactured by tax on USD earners routes straight back into forex pressure.
• THe 2030 mono-currency deadline was removed in February 2026 and replaced with a conditions-based framework. Expanding ZiG-only taxes is the demand condition being built by force where the others are met by patience.

Harare- Finance, Economic Development and Investment Promotion Minister , Professor Mthuli Ncube has told Treasury will widen the range of taxes payable only in Zimbabwe Gold, a measure due in the 2026 Mid-Term Budget and Economic Review. The stated purpose is to manufacture demand for the local currency and move the economy along its de-dollarisation roadmap.

A tax is a recurring obligation that the taxpayer cannot decline, so requiring it in ZiG forces every liable person and company to acquire ZiG on a schedule the state sets.  However, does demand created this way deepens the currency or simply relocates pressure from one part of the monetary system to another.

The starting position is a currency that has gained ground and remains a minority. The proportion of electronic transactions settled in ZiG has risen from 26% at the April 2024 launch to between 35 and 40% by mid 2026, on RBZ figures. That leaves the US dollar carrying 60 to 65% of electronic value, above 80% of bank deposits, and by the central bank’s own account more than 90% of corporate earnings and at least 80% of the transactions of large and medium businesses.

Two years after launch the ZiG is a genuine second currency and nowhere near a dominant one.

The stability that makes the policy thinkable is real and recent. The exchange rate has held near 26.2 to the dollar through 2026, against a launch rate around 13.56 and a first-half 2024 collapse that took roughly half the official value and three quarters of the parallel value. Annual inflation has fallen into single digits for the first time in over three decades. The ZiG is backed by about US$1.3 billion in gold and foreign currency as at March 2026, close to twice the value of ZiG deposits in the banking system. That backing, and a policy rate held at 30%, are what have bought the exchange rate its quiet year.

The mechanism the minister is reaching for is sound in theory and well established in monetary history. A currency holds value in part because the state compels its use, and the sharpest form of compulsion is the tax bill. Customs duty already settles in ZiG. Corporate income tax runs on a 50:50 local and foreign currency split, and any company earning above half its revenue in foreign currency must account for tax on that same split. Extending the list, to more duties, to fees for government services, to a larger share of corporate tax, widens the base of forced buyers.

Each addition is a standing order for ZiG that did not exist before, and standing orders are what a young currency lacks.

The difficulty sits in the gap between where the tax falls and where the currency is earned. More than 90% of corporate earnings are in US dollars. A company told to settle a larger share of its obligations in ZiG, when its revenue arrives in dollars, must buy ZiG on the interbank market to do so. That converts a tax measure into a foreign exchange transaction, and it does so for every liable exporter and dollar-earning firm at once.

The demand the policy manufactures for ZiG is matched, dollar for dollar, by demand to sell dollars for ZiG, which is pressure on the exact exchange rate the whole strategy depends on holding still.

This is not a hypothetical risk, since the economy has already run the experiment. When ZiG circulation was pushed up in 2024, the increased local currency in the system exerted additional pressure on forex and produced a resurgence of the volatility that the currency was launched to end. The RBZ contained it with the bluntest tools available, a 35% policy rate then (now 30%) which was the highest in Africa, statutory reserve requirements of 30% on demand deposits, non-negotiable certificates of deposit to mop up liquidity, and the deferral of the state’s own ZiG obligations to contractors, suppliers and exporters. The stability on display in 2026 is the output of severe monetary compression, and expanding ZiG-only taxes adds demand into a system whose calm is being actively held down.

The exporter surrender arrangement shows the same tension from the other side. Exporters already receive 30% of their proceeds in ZiG, which is a forced conversion of foreign earnings into local currency at the point of receipt. Initially, small-scale gold miners moved from being paid entirely in dollars to a 90% dollar and 10% ZiG split, which was however, overturned. These are demand-creation measures that work by taking dollars out of the earner’s hands, and they carry a cost.

An exporter holding a ZiG balance carries the depreciation and inflation exposure that the dollar balance would not, and where an exporter can arrange its affairs to reduce that exposure, it will. Demand compelled at the till is not the same as demand freely held.

The confidence data cuts in two directions and both belong in the picture. On one side, the growth of ZiG in electronic payments, the fall in discriminatory pricing against the currency, and the rising acceptance reported by businesses are real gains that a manufactured-demand reading alone would miss.

On the other, the deposit and earnings mix shows where trust actually sits when holders are free to choose. A Zimbabwean who can hold dollars still largely does, and the memory that sets that preference is the ZiG’s own first six months, when gold backing did not prevent the currency losing half its official value. Policy is working to build confidence and to compel usage at the same time, and the two are not the same project.

The removal of the hard deadline is the most telling recent move, and it reframes the tax measure. In February 2026 the RBZ dropped the fixed 2030 target for ending the multi-currency system and replaced it with a conditions-based framework, requiring durable single-digit inflation, foreign reserves of three to six months of import cover, a stable exchange rate, an efficient foreign exchange market, and rising demand for the local currency before the switch is made. Four of those five conditions are met by patience and discipline.

The fifth, rising demand, is the one the government can act on directly, and expanding ZiG-only taxes is the action. The tax policy is the lever for the single mono-currency condition that will not arrive on its own.

That reframing exposes the strategic bet underneath. Organic demand for the ZiG, the kind that shows up when people choose to hold and transact in it, has climbed to somewhere below 40% and has not yet crossed into majority. In place of waiting for preference to close the gap, the state is using its power to tax to close it by compulsion, on the reasoning that forced circulation today becomes habitual acceptance tomorrow. The historical record on that reasoning is mixed.

Compelled demand can bridge a currency to genuine acceptance where the fundamentals are sound, and it can also mask the absence of acceptance until the compulsion is tested. The distance between 40 percent chosen and a functioning mono-currency is the distance this policy is trying to cover, and tax is a demand instrument, not a confidence instrument.

The wider fiscal setting narrows the room for error. Zimbabwe is already among the more heavily taxed economies in the region, with VAT at 15.5 percent, an intermediated money transfer tax, and a dense schedule of fees and levies that business bodies have repeatedly asked to be eased. Total public and publicly guaranteed debt stood at US$23.4 billion, 44.7 percent of GDP, as at September 2025, and domestic debt service is already diverting resources from delivery. Layering a currency-composition requirement onto that base changes the currency a taxpayer must find without lowering the amount, and for a dollar-earning firm it raises the effective cost of compliance by the spread and the exchange risk on every ZiG payment. The demand is manufactured on the revenue side and paid for on the private balance sheet.

Watchpoints

The first variable is the exchange rate across the initial tax cycle affected by the broadened ZiG obligations, presently around 26.2, because demand imposed on dollar earners transmits immediately to the interbank market.

The second is the proportion of electronic transactions settled in ZiG against the 35–40% range, with increases due to tax enforcement requiring separate interpretation from increases due to market preference.

The third is the detail expected in the Mid-Term Review, namely whether government service fees and a greater portion of corporate tax are designated ZiG-only, which defines the scale of administratively created demand.

The fourth is any re-emergence of a wider parallel market premium, which serves as the first warning that compelled demand is exceeding available reserves and that the policy rate is no longer anchoring the official rate.

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