Published: 13 hours ago

MEMBERS of Parliament (MPs) have urged government to formalise Zimbabwe's vast informal sector, broaden the tax base and urgently review what they described as an unfair tax burden on the poor.

The calls were made during debate on the 2025 mid-term budget in the National Assembly on Wednesday, with lawmakers highlighting structural economic weaknesses and deep social inequalities.

Chakari MP Andrew Nkani (Zanu-PF) expressed concern that government revenue collection remains heavily reliant on a shrinking formal sector while over 76% of businesses operate informally.

He said punitive tax levels were discouraging registration, with many small traders avoiding the Zimbabwe Revenue Authority (Zimra) "just like they do the police".

"Maybe it is because the taxes are too high. Let us address that issue so that they register their companies legally," Nkani said.

Zanu-PF MP Scott Sakupwanya welcomed reforms aimed at reducing licensing requirements and cutting unnecessary levies, saying this would support startups. He emphasised that government should prioritise expanding the tax base, not just raising rates.

"We must create an environment where every citizen feels duty-bound to pay tax because of enabling policies," he said.

Other MPs raised concerns over the regressive nature of Zimbabwe's tax system.

Opposition MP Edwin Mushoriwa said consumptive taxes such as VAT, which contribute 25,3% of government revenue, unfairly burdened low-income citizens since they are charged uniformly across income levels.

"The tax burden is weighing heavily on the poor in our country," he said.

He also criticised the intermediated money transfer tax (IMTT), describing it as a "tax on poverty" that discourages financial inclusion by driving people back to cash.

Zanu-PF MP Tanatswa Mukombeni added that informal businesses remained "hard to tax", which was limiting government's fiscal capacity.

"These are a group of hard-to-tax businesses, and this has the potential of restraining the national fiscus," he argued.

Lawmakers from across the political divide unanimously called for an urgent review of the country's tax regime to promote fairness and reduce inequality.

According to the World Bank, over 40% of Zimbabweans live in extreme poverty, while education and health services continue to suffer from chronic underfunding.
- Newsday

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