Questions rise over Zimra’s increased net collections

By Business Reporter | Jun 30, 2026 | 4 Min read

ZIMBABWE’S tax authority is being credited with an impressive revenue collection performance.

The Zimbabwe Revenue Authority (Zimra) recorded a 47% increase in net collections for the first five months of 2026, pulling in US$4,34 billion against US$2,95 billion over the same period last year.

Over the preceding five-year strategy cycle, absolute collections grew by nearly 68%, from US$4,56 billion in 2021 to US$7,65 billion in 2025.

Consequently, tax revenue is now on course to contribute 16% of national GDP this year, with a stated ambition of reaching 22% by 2030.

On the surface, these are the numbers of a functioning fiscal State.

But they should not be too quickly presented as evidence that enhanced investigations, by themselves, have unlocked new tax morality or uncovered a previously hidden reservoir of lawful tax.

This is because the architecture behind those numbers is more troubling than the headline figures suggest.

“Beneath the growth story lies a fiscal structure that is heavily dependent on a narrow base. Indirect taxes account for 58,63% of total revenue, with VAT alone contributing nearly 24%.

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“Just five formal sectors — financial services, information and communications technology, manufacturing, mining, and wholesale and retail trade — carried 83,35% of the entire national tax outturn in 2025,” a new industry analysis reads.

“Manufacturing alone drives close to a fifth of all collections, which means that anything disrupting formal production or retail supply chains has the potential to compress the very VAT loop on which the fiscus depends.”

This analysis follows growing concerns raised by the Zimbabwe National Chamber of Commerce last week, and the Confederation of Zimbabwe Industries the week prior, over Zimra’s increasingly aggressive tax enforcement, which executives say is making the formal economy progressively less attractive.

“The engine driving collection within this concentrated base is an aggressive audit and reassessment campaign.

“Zimra’s Audits and Investigations division recovered ZiG4,63 billion and US$540,73 million over the fiscal year. Sector-based investigations yielded the larger share, while routine audits finalised over 7 000 cases,” the analysis reads.

“The practical consequence has been a 35,53% increase in outstanding tax debt, which now stands at ZiG31,15 billion.

“Zimra acknowledges that this spike reflects intensive compliance checks and heavy corporate assessments being raised against the market. That distinction matters.

“A reassessment raised is not the same thing as a tax gap lawfully closed, and a book entry on a taxpayer account is not necessarily evidence of cash collected, tax finally due, or misconduct proved.”

The legal question, which the revenue authority’s headline numbers do not address, is, therefore, more precise.

How much of the reported success reflects genuinely effective investigation of undeclared tax?

And how much reflects the administrative reopening of positions where taxpayers had already filed, accounted, and paid in local currency under the return architecture then publicly demanded by the State?

“That is the weak point in the celebratory narrative. If the apparent collection gain is built substantially on additional assessments which recharacterise historic local-currency compliance as foreign-currency underpayment, then the success story is less about investigative excellence than about the coercive power of reassessment,” the industry analysis read.

“It is the difference between finding hidden income and converting a previously accepted compliance position into a new demand after the event.”

Zimbabwe’s multi-currency environment has created a specific legal problem at the heart of VAT administration.

The reassessment practice proceeds as though local-currency and foreign-currency VAT liabilities have always stood on separate legal rails, but the Value Added Tax Act does not clearly enact a bifurcated computation regime.

“The objection is not that Zimra may never investigate VAT compliance. It is that investigation cannot be used to supply a computation rule which Parliament did not clearly enact.

“There is no safe basis for treating administrative notices or later practice as though they lawfully created a dual-currency VAT system that the statute itself never clearly put in place,” the industry analysis reads.

“The case law that has sustained Zimra’s reassessment powers — including the Supreme Court decisions in Inamo Investments, Zimplats, and Delta Corporation — has been read too broadly.

“Inamo speaks to foreign-currency remittance under section 38(4) of the VAT Act. It does not, without more, answer the prior question of how a mixed-currency net VAT liability is to be computed.”

Allowing a remittance provision to perform the work of a computation rule is an analytical stretch that the statute does not plainly authorise.

Zimplats, properly read, accepted an administrative fallback where direct tracing was not possible on the facts before the court. It did not judicially enact a general ratio-based formula for multi-currency taxation.

“Finance Act No. 8 of 2022 is instructive on precisely this point. Parliament legislated to introduce section 37AA, which formalised the Public Notice 26 of 2019 formula as a statutory default. But that provision was not given retrospective effect to periods before January 2022,” the legal analysis reads.

“The fact that parliament found it necessary to legislate at all is itself evidence that the earlier framework lacked adequate statutory footing. Administrative notices — including Public Notice 15 of 2019, through which Zimra effectively introduced a bifurcated VAT return architecture, and Public Notice 68 of 2022, which formalised separate forex returns — may explain administration. They cannot do the work of regulations or of Parliament.”

The point is particularly acute where taxpayers had already discharged obligations in local currency in accordance with the operative return architecture of the time.

“A later bifurcated foreign-currency assessment should not be made to appear as the discovery of unpaid tax merely because the taxpayer account can be restated in a different currency configuration,” the industry analysis reads.

Unless the governing law authorised that computation and preserved a clear mechanism for recognising historic local-currency credits, the reassessment risks becoming a device for re-opening paid tax rather than correcting non-compliance.