By Vivid Gwede
Harare – Complex, multiple, and high taxes are increasingly becoming an albatross on Zimbabwe’s corporates and citizens closing the economic space for both to thrive.
Since 2018, the central government and local authorities constrained for funding due low savings and foreign investment in the subdued macro-economic environment, have been increasing taxes and levies to generate revenue.
In the 2025 budget, the Ministry of Finance broadened existing taxes and introduced new ones, including Value-Added Tax (VAT) adjustments, and additional corporate taxes.
The current taxation regime for corporates spanning over 50 taxes and administrative bodies complicates compliance and makes the business operating environment unfriendly.
Zimbabwe boasts one of the highest income tax rates in Africa, affecting real household incomes.
Compounding the situation, local authorities have also been increasing levies, including the Harare City Council introducing levies for water infrastructure, street lighting, and emergency services in the 2025 budget statement.
However, a positive development lies in the Ministry of Finance announcing plans to reform the country’s tax regime by mid-year.
Considering Zimbabwe’s tax regime, with complex, multiple, and high taxes, is considered one of the most onerous in the region compared to South Africa and Senegal proposed reforms are welcome.
Most of the taxes were introduced without adequate consultation, while some have already shown their negative effects, for instance with business and citizens complaining against the Intermediated Money Transfer Tax (IMTT).
In November 2024, launching the Zimbabwe Economic Freedom Audit (ZEFA) Report, local advocacy group The Eastern Caucus, and its US-based partners the Atlas Network, and the Fraser Institute highlighted the country’s poor world ranking of 164 out of 165 countries, only bettering Venezuela.
Zimbabwe’s tax regime impacts two economic freedom indicators, namely the size of government and regulation.
The Zimbabwe Taxpayers’ Platform (ZITAP) has welcomed the earmarked reform initiative by government, emphasising the need for efficient and lean public administration.
For the success of the reform process proposed by the Treasury, government should consult all stakeholders including citizen groups and the private sector.