It is shocking that the government, of at the instruction of the ruling Zanu PF has chosen to prioritise constitutional changes at a time industry has been pining for solutions that can stimulate economic revival.
Formal industry bodies have made numerous presentations to authorities over taxes and levies businesses have to pay.
Now that attention has shifted to constitutional amendments, players in industry can almost forget about having their pleas heard in time as all energy and resources have been diverted towards Constitution of Zimbabwe Amendment (No 3) Bill.
The Zimbabwean economy is largely informal with the informal sector controlling around 76% of revenue circulating in the country, albeit outside formal banking platforms.
Very few players in the informal sector contribute to the fiscus by way of taxes, which explains why the government has introduced a raft of new taxes on the formal sector.
Industry has always complained about the Intermediated Money Transfer Tax (IMTT), arguing it was too high and was pushing many into the informal sector where they
The government must find alternative ways of raising revenue to fund its programmes, not to rely on taxes and levies.
Already formal entities, for instance in the retail sector, have had to either close shop, seek corporate rescue and streamline operations as the operating environment became more and more difficult.
Choppies Supermarket closed shop, TM Pick n Pay’s South African parent firm has written down its Zimbabwean investment to zero over perennial losses, while OK Zimbabwe — by far one of the country’s biggest retail chains — remains in the doldrums despite juggling its executive last year.
The writing is on the wall and the sector, which has approached the government on several occasions over the tax system, has also alleged unfair competition presented by informal traders. Noone seemed to heed these pleas.
However, when one walks across any town, you can see vendors selling products at supermarket entrances, the same merchandise as the supermarket and business is booming.
The major reason for this boom is that they are not subjected to taxes or any other statutory levy.
At times, the bulk of their merchandise is smuggled into the country and they do not pay duty, something formal businesses have to do.
In other words, formal business is being punished for being compliant with the government piling more and more taxes as well as other charges and levies.
Most of the big formal businesses employ a significant number of people and their closure signals pain and suffering for the affected employees and their families.
Last year, the Zimbabwe National Chamber of Commerce, Confederation of Zimbabwe Industries and the Confederation of Zimbabwe Retailers all pleaded with Finance, Economic Planning and Investment minister Mthuli Ncube over taxes and unfair competition.
Ncube only acceded to a 0,5 reduction of IMTT for Zimbabwe Gold transactions, ironically in an environment dominated by United States-dollar dominates transactions.
The minister did not listen to complaints over unfair competition posed by informal traders.
Downtown Harare, for instance, is teeming with informal traders, mainly foreigners.
Sugar tax came into effect in the country in January 2024 through the 2024 annual budget.
Initially pegged at US$0,002 per gramme of sugar, the tax was later reduced to US$0,001 per gramme in February of the same year.
Beverage manufacturers have complained heavily over the imposition of the tax which threatens to impact their earnings significantly.
On another level, the IMTT is a threat to the government’s drive towards financial inclusion as more and more people will shun electronic transactions in favour of cash for fear of these taxes and other levies and charges banks impose from time to time.
There is more appeal in the pillow bank as opposed to formal banks because of these issues of tax and charges.
During the presentation of the 2026 national budget Ncube increased Value-Added Tax to 15,5% as a way of recouping the 0,5 shed on IMTT, confirmation that taxes are the government's major source of revenue although it runs 107 entities under the John Mangudya-led Mutapa Investment Fund (MIF).
Noone is clear about the goings-on at MIF. Before the current arrangement SOEs’ failure to perform was blamed on poor governance, financial profligacy and corruption among other ills at these entities.
The collapse of the Cold Storage Company, struggles at the National Railways of Zimbabwe, the Zimbabwe National Water Authority, Zesa Holdings and several others have been attributed to the above challenges.
The 15% digital services withholding tax does not stand as an incentive for business particularly because this is levied on foreign entities.
This is at a time when the whole world is going digital and artificial intelligence is growing into becoming the norm.
Taxation should not be the only source of government revenue and actually stands as a barrier for investors, especially when they consider the country’s repatriation laws.
As things stand taxation has come in as one of the biggest enemies for business.
We all know that mining, especially gold, constitutes about 60% of the country’s export earnings, which translates to around 14% of Zimbabwe’s gross domestic product.
It is also in the public arena that small scale and artisanal miners have been driving the high output and deliveries to Fidelity Printers and Refiners.
Sadly, it is also a public secret that a significant amount of gold is smuggled out of the country, costing the economy heavily in the process.
The same fate befalls other minerals such as platinum group minerals, lithium, chrome ore and diamonds among many others.
According to reports, Zimbabwe loses close to US$1 billion annually to smuggling that takes place at the country’s ports of entry.
The Democratic Official Party has on several occasions shared many of its suggestions and ideas on economic revival but it appears Zanu PF is bent on going it alone to the detriment of the wider Zimbabwean population in general and the country’s economy in particular.
The government should allow fresh ideas from diverse sources on economic revival because when we are all gone, Zimbabwe will still remain, populated by those who would want to take us to account for destroying their futures.