THE Zimbabwe National Chamber of Commerce (ZNCC) has embarked on a state of the economy survey, to ascertain the tax environment and its contribution to the “new normal” economy.
BY MTHANDAZO NYONI
In its industry update, ZNCC said the survey seeks to help identify concerns raised by businesses over the country’s tax regime, regarded as unfavourable by businesses.
“Taxation has either direct or indirect effects on almost every aspect of production and distribution in modern economies, therefore, the Chamber is embarking on another state of the economy survey on “Zimbabwe tax environment and its contribution to the new normal economy,” it said.
“This follows business concerns regarding the taxion policy in Zimbabwe; hence the survey seeks to help identify concerns raised to enhance compliance.”
Zimbabwe’s tax system has remained a huge burden to the economy at 61,1%, according to the 2017 Index of Economic Freedom published by The Heritage Foundation, a United States-based think-tank.
The Southern African nation is ranked 42nd on the continent and 11th in Sadc, in terms of tax regimes.
Businesses and the tax-paying public have long complained about taxes as being exorbitant and unaffordable, but to no avail.
Tax specialists said even though Zimbabwe’s tax rates were in line with other countries, the tax heads were continuously increasing unnecessarily.
“Our penalties are excessive and also applied for no slimmest reason at all to impose them,” principal tax consultant with Bulawayo Tax Advisory Services Peter Mgodi, told NewsDay recently.
“We have no need for new tax heads/new tax laws. What we need is efficient, human and trade facilitating tax administration of the existing laws. We also need efficient use of the collected revenues.”
Meanwhile, ZNCC said the macroeconomic environment continues to be characterised by forex shortages which are weighing on business. It, however, saidbusinesses could take advantage of the $400m dollar nostro stabilisation facility announced in the 2018 monetary policy statement.
“This will help utilise real time gross settlement systems balances to acquire raw materials given that one of the objectives of the facility is to meet the foreign exchange requirements for the importation of essential requirements,” it said.