The Zimbabwe Revenue Authority’s (Zimra) increasingly aggressive tax enforcement could cost the country’s capital markets dearly, with the Zimbabwe Stock Exchange (ZSE), the Victoria Falls Stock Exchange (VFEX), and the soon-to-be-launched Zimbabwe Entrepreneurship Exchange (ZEEX) at risk of losing prospective listings, observers have warned.
The latest warnings build on growing concerns raised by the Confederation of Zimbabwe Industries over Zimra’s increasingly aggressive tax enforcement, which executives say is making the formal economy progressively less attractive.
In recent months, businesses have criticised the tax authority’s intensified audits, retrospective tax assessments, and ‘pay now, argue later’ approach, arguing that they are costing companies millions of dollars, straining cash flows, and diverting resources away from productive investment.
Zimra is seeking to widen the tax base by registering up to 100,000 new taxpayers while pursuing a revenue target of more than US$9 billion for this year.
However, national statistics show that only 23.9% of the country’s 204 798 operational establishments were formally registered as of June 2025, and the authority’s own data confirms this is the group paying most of the taxes.
Thus, with only 51 companies listed on the ZSE and VFEX, leaving the vast majority as potential capital market candidates—even for ZEEX—Zimra’s aggressiveness could chase fresh liquidity from new issuers.
This is because, at any given time, Zimbabwe has an estimated US$14 billion annually.
“If you talk to an average businessperson in the room, one of the headwinds to doing business remains the tax environment, which is harsh.
“When we talk to our members, for every five members, three will tell you they are tired of tax audits,” Zimbabwe National Chamber of Commerce chief executive officer Christopher Mugaga told guests during the organisation’s just-ended annual congress.
He said the chamber had engaged companies with the potential to list on local exchanges but found that many were hesitant to do so because of tax.
“We went on to ask companies which have potential to list, either on the Zimbabwe Stock Exchange or the Victoria Falls Stock Exchange, and one of the reasons why companies are not even there is because they are scared to list on the exchange,” Mugaga said.
“They feel that by disclosing more information about their operations and profitability, they may attract increased tax scrutiny.”
So, while the ZSE and VFEX each have values worth billions, providing a significant capital-raising opportunity in Zimbabwe’s illiquid market, the tax regime remains an impediment.
TN CyberTech Investment Holdings Limited chief executive officer Tawanda Nyambirai said the challenge was not necessarily the amount of tax collected, but the number of taxes, levies, and compliance requirements imposed on formal businesses.
Earlier this year, the World Bank found that Zimbabwe’s business regulatory environment is constraining private sector growth, noting a “rise in excessive business regulations” following widespread criticism over new taxes introduced this year.
“The issue is tax layering. We have a shrinking formal sector subjected to VAT, corporate taxes, numerous levies, and licensing fees across different sectors,” Nyambirai said. “When you look at the cumulative effect of these obligations, you can conclude that we have a tax problem”.
He argued that compliant businesses were effectively being punished while the larger informal sector remained outside the tax net.
“The formal sector appears to be punished for compliance because it can pay tax; it is then overtaxed,” Nyambirai said.
“The problem is not only taxation itself, but the layering of taxes on a shrinking base of compliant businesses.”
Business leaders at the congress noted that broadening the tax base, reducing the compliance burden on formal enterprises, and creating a predictable regulatory framework would be critical to attracting investment and encouraging listings on local exchanges.
The ZSE is in the midst of a company exodus, with companies like Econet Wireless Zimbabwe delisting in March, and TSL Limited and First Mutual Properties planning their exits from the bourse.
Despite all these concerns, Zimra domestic taxes commissioner Misheck Govha said the taxman was supportive of businesses.
“Let me then say, as Zimra, we are really supportive of the business, and we have done a lot in terms of making sure that we have a digital platform that is acceptable, or digital platforms that are acceptable to all—that is the small, the informal, or the SMEs budget sector,” Govha said.