News / National
Zimra defends aggressive tax enforcement
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Foreign currency-generating sectors such as tourism and agriculture are being choked by excessive regulations, multiple taxes, and bureaucratic red tape, industry experts have warned. Despite being crucial contributors to Zimbabwe's economy, these sectors say their growth is being stifled by overlapping regulatory frameworks and punitive costs.
Over recent months, business leaders have voiced mounting frustration over what they describe as excessive taxation and outdated regulations that continue to weigh down operations. Research by local fact-checking organisation ZimFact revealed that Zimbabwean businesses contend with at least 50 different taxes drawn from legislation including the Finance Act, Income Tax Act, Customs and Excise Act, Capital Gains Tax Act, VAT Act, Stamp Duties Act, and the Revenue Authority Act.
In addition to these taxes, businesses must also comply with a host of obligations imposed by municipal councils, statutory bodies, and monetary authorities, further adding to operational costs and delays.
Speaking on the issue, Tourism Business Council of Zimbabwe chief executive officer Paul Matamisa said accommodation providers require up to 25 licences, while tour operators need 15 different licences to operate legally.
"All these come with costs, and it's not just financial. There is also the time spent running around fulfilling these regulatory requirements. It adds to our input costs and affects the efficiency of our operations," Matamisa said.
He stressed the need for government to rethink its regulatory approach.
"Government must accept the principle of being a facilitator, not a gatekeeper trying to extract revenue at every stage. The state will still earn revenue through corporate taxes after businesses have operated successfully, but overregulation only suffocates potential growth," he warned.
Matamisa said that despite efforts by businesses to survive under tough economic conditions, many end up making losses due to regulatory and compliance costs.
"Ultimately, if businesses cannot sustain themselves, they collapse - and that hurts the economy more in the long term," he said.
However, Matamisa remained cautiously optimistic about the future of the tourism industry, expressing hope that the last quarter of 2025 would see a resurgence in domestic tourism, buoyed by increased disposable incomes if the government takes steps to address regulatory issues and improve workers' earnings.
Similar sentiments were echoed by the agricultural sector, which also faces a tangled web of multiple regulations, taxes, and levies that hamper productivity.
Zimbabwe Farmers Union (ZFU) economist Nyasha Taderera called for harmonisation of regulations to eliminate duplication and streamline compliance processes.
"We need a one-stop-shop for regulatory compliance so farmers aren't burdened with running around different offices. Harmonised regulations will make it easier and more cost-effective for farmers to comply," she said.
Taderera also criticised current levy structures, arguing that many were unfair and detached from farmers' realities.
"Levies like the land tax are charged per hectare, ignoring regional differences in productivity or scale of production. Farmers in marginal regions like four and five, where yields are low, suffer the most," she said.
She suggested a fairer system would base levies on returns per hectare, rather than a blanket fee.
Both the tourism and agriculture industries are critical to Zimbabwe's economic fortunes, generating over US$2 billion in foreign currency annually. Industry players are urging the government to urgently reform the current regulatory and tax systems to protect these sectors' viability and unlock further growth.
Over recent months, business leaders have voiced mounting frustration over what they describe as excessive taxation and outdated regulations that continue to weigh down operations. Research by local fact-checking organisation ZimFact revealed that Zimbabwean businesses contend with at least 50 different taxes drawn from legislation including the Finance Act, Income Tax Act, Customs and Excise Act, Capital Gains Tax Act, VAT Act, Stamp Duties Act, and the Revenue Authority Act.
In addition to these taxes, businesses must also comply with a host of obligations imposed by municipal councils, statutory bodies, and monetary authorities, further adding to operational costs and delays.
Speaking on the issue, Tourism Business Council of Zimbabwe chief executive officer Paul Matamisa said accommodation providers require up to 25 licences, while tour operators need 15 different licences to operate legally.
"All these come with costs, and it's not just financial. There is also the time spent running around fulfilling these regulatory requirements. It adds to our input costs and affects the efficiency of our operations," Matamisa said.
He stressed the need for government to rethink its regulatory approach.
"Government must accept the principle of being a facilitator, not a gatekeeper trying to extract revenue at every stage. The state will still earn revenue through corporate taxes after businesses have operated successfully, but overregulation only suffocates potential growth," he warned.
Matamisa said that despite efforts by businesses to survive under tough economic conditions, many end up making losses due to regulatory and compliance costs.
"Ultimately, if businesses cannot sustain themselves, they collapse - and that hurts the economy more in the long term," he said.
However, Matamisa remained cautiously optimistic about the future of the tourism industry, expressing hope that the last quarter of 2025 would see a resurgence in domestic tourism, buoyed by increased disposable incomes if the government takes steps to address regulatory issues and improve workers' earnings.
Similar sentiments were echoed by the agricultural sector, which also faces a tangled web of multiple regulations, taxes, and levies that hamper productivity.
Zimbabwe Farmers Union (ZFU) economist Nyasha Taderera called for harmonisation of regulations to eliminate duplication and streamline compliance processes.
"We need a one-stop-shop for regulatory compliance so farmers aren't burdened with running around different offices. Harmonised regulations will make it easier and more cost-effective for farmers to comply," she said.
Taderera also criticised current levy structures, arguing that many were unfair and detached from farmers' realities.
"Levies like the land tax are charged per hectare, ignoring regional differences in productivity or scale of production. Farmers in marginal regions like four and five, where yields are low, suffer the most," she said.
She suggested a fairer system would base levies on returns per hectare, rather than a blanket fee.
Both the tourism and agriculture industries are critical to Zimbabwe's economic fortunes, generating over US$2 billion in foreign currency annually. Industry players are urging the government to urgently reform the current regulatory and tax systems to protect these sectors' viability and unlock further growth.
Source - Newsday