Zimbabwe’s Tax Regime Chokes Struggling Businesses

The indicator shows that the Zimbabwe’s tax burden of GDP is the third largest among its regional counterparts.

Botswana has the highest tax burden of 30,2 percent of GDP, followed by South Africa with a tax burden of 25,4 percent of GDP.

Kenya’s stands at 19,4 percent; Mauritius is at 18, 6 percent and Zambia’s tax burden of GDP stands at 17,3 percent.

Rwanda has the lowest tax burden of 13,3 percent of GDP.
The National Economic Consultative Forum (NECF), in its Zimbabwe National Competitiveness Report (2016) said the high level of taxes is a significant burden to local businesses.

“In terms of local businesses, the  Zimbabwean tax regime is more costly and disadvantaging compared to [other countries],” it said.

A World Bank Doing Business (2015) report showed that Zimbabwe — in comparison to SADC peers Zambia, South Africa, Botswana and Mozambique — was third in terms of taxation of business profits but highest in terms of labour tax and contributions and other taxes and overall ranks second in terms of total tax rate as a percentage of profit.

An analysis of Zimbabwe’s tax environment has shown that the multiplicity of fees, licences, regulatory charges, permits, and other levies, such as Environmental Management Agency fees, Medicine Control Authority of Zimbabwe licence, National Social Security Authority, Radiation Protection Authority Zimbabwe, and Health Professions Authority, among others, have huge impacts on the profitability of enterprises.