Finance Minister Mthuli Ncube has announced a new 0.5% tax on the sales value of several fast foods, effective from January 1, 2025.

In his presentation of the 2025 National Budget at the New Parliament in Mt Hampden on Thursday, Ncube said the tax aims to encourage food operators to adopt healthier culinary practices and promote better eating habits. He said:

The consumption of highly processed food has been identified as one of the factors responsible for the prevalence of obesity and associated non-communicable diseases, hence, the need for Government to promote responsible consumption of such foods.

In view of the above, I propose to introduce a Fast Foods Tax on the value of the following food items sold by Fast Food Retail Outlets and Restaurants at a modest rate of 0.5% on the sales value, with effect from 1 January 2025.

The fast foods listed by Ncube are Pizza, Burger and Hot dogs, Shawarma, French fries, Chicken, Doughnuts and similar products, and, Tacos.

Ncube also introduced a 10 per cent withholding tax on gross winnings by sports betting punters. He said:

Sports betting punters currently receive income from winnings, which is not taxable under Personal Income Tax. To include punters in the tax base, I propose to introduce a 10% withholding tax on gross winnings, effective 1 January.

Since he was appointed Finance Minister following the November 2017 military coup, Ncube has introduced several controversial taxes that have further strained the financially burdened Zimbabwean population.

While the government’s intention behind imposing taxes on fast foods and sports betting winnings is to broaden the tax base, over-taxation can have several detrimental effects on both the economy and society.

High tax rates can discourage individuals and businesses from investing, working, or expanding their activities, ultimately reducing economic growth and productivity.

Additionally, when people face heavy taxation, they have less disposable income to spend on goods and services, which can dampen consumer spending and negatively impact businesses.

Furthermore, an over-reliance on high taxes for revenue can result in inefficiencies in government spending and a lack of fiscal discipline, as there may be fewer incentives to manage public funds responsibly.

More: Pindula News