Over taxation choking SMEs in Zimbabwe

The Zimbabwean Government’s penchant for taxation, cumbersome company registration processes and policy inconsistency has given rise to the informalisation of businesses, particularly SMEs.

Take for example in the 2024 budget strategy paper, published in August 2023, the Zimbabwean government is expecting to foot the country’s monetary needs by further taxing businesses and individuals. It sounds unimaginable that 95 per cent of the country’s revenue is expected to come from taxes.

The government says in 2024, total revenue collections are projected at 19.2% of GDP broken down as tax receipts accounting for 95% of total revenue and non-tax revenue contributing the balance of 5%.

With Professor Mthuli Ncube having been reinstated as Minister of Finance and Economic Development, we are likely not to see any policy shift with regard to taxation. However, this tax regime is prohibitive of growth and suppresses the development of SMEs and entrepreneurship and one can only hope for a review in the coming years.