Piecemeal tax reforms won’t save the economy

Zimbabwe’s tax system is broken beyond repair.

Business leaders, economists, and investors are in agreement, minor tweaks will not be enough to fix an overly complex, punitive, and uncompetitive taxation framework.

What Zimbabwe needs is a complete tax system overhaul—one that reduces the burden on businesses, encourages investment, and supports economic growth.

Anything less will continue to suffocate enterprises, drive companies into the informal sector, and shrink the government’s revenue base.

For years, business leaders have warned that Zimbabwe’s tax regime is one of the most hostile in the region. With over 50 different taxes weighing down companies, the cost of doing business has skyrocketed, forcing many to either shut down or operate informally to survive. Instead of encouraging economic expansion, the current tax framework discourages investment, drives capital flight, and stifles growth.

As CEO Africa CEO, Kipson Gundani pointed out, any tax review must go beyond minor adjustments and introduce meaningful, bold reforms. A mere reduction in tax rates will not be enough—Zimbabwe needs a fundamental restructuring of how taxes are levied, collected, and administered.

Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro echoed these sentiments, emphasizing that too many taxes make businesses uncompetitive. High tax rates don’t just discourage foreign investors; they also push local businesses into survival mode, preventing expansion and job creation. Instead of broadening the tax base, Zimbabwe’s approach has led to a shrinking number of formal taxpayers—meaning fewer revenues for the government and a worsening economic crisis.

Investment analyst Tafara Mtutu issued a stark warning, if the government does not undertake a full-scale tax overhaul, Zimbabwe’s tax-to-GDP ratio will continue to decline. As businesses collapse under the weight of excessive taxation, state revenues will plummet, forcing authorities to introduce even more desperate and damaging fiscal measures.

A well-structured tax system is not just about collecting revenue; it’s about fostering an environment where businesses can thrive and contribute to national development. Successful economies worldwide have recognized the power of tax-friendly policies in driving growth. Countries like Ireland and Argentina have leveraged investor-friendly tax frameworks to attract capital and stimulate economic expansion. Zimbabwe must take a similar approach.

The Finance Ministry must act decisively. It needs to eliminate redundant taxes, streamline tax administration, and create a transparent, predictable system that encourages compliance. Without urgent reform, Zimbabwe risks deeper economic collapse, rising unemployment, and an ever-expanding informal sector where taxation is nearly impossible to enforce.

The call for a tax overhaul is not just a business demand—it’s an economic necessity. The government must listen and implement sweeping reforms before it’s too late. Zimbabwe cannot afford another cycle of patchwork adjustments, the time for comprehensive tax reform is now.

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