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Zimbabwe launches new online tax system
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The Zimbabwean government has completed the rollout of a new online Tax and Revenue Management System (TaRMS), developed under the US$10.4 million Tax and Accountability Enhancement Project, with support from the African Development Bank (AfDB).
The system, formally launched on August 18 in Harare by Finance, Economic Development and Investment Promotion Deputy Minister Kudakwashe David Mnangagwa, aims to improve transparency in tax collection, curb financial leakages, and strengthen the capacity of the Zimbabwe Revenue Authority (Zimra). The project began in 2023 and has been implemented in phases since then.
"The Tax and Revenue Management System was developed under a US$10.4 million Tax and Accountability Enhancement Project supported by the African Development Bank as part of efforts to enhance domestic resource mobilisation," the AfDB said. The bank contributed US$7 million for system design and development, while the Zimbabwean government funded hardware procurement, stakeholder training, and change management activities.
Early results suggest significant gains. According to Zimra, revenue collected from new taxpayers increased by 238% in 2024, the first full year of TaRMS rollout, compared to 2023. Deputy Minister Mnangagwa described the system as a bold step in Zimbabwe's economic reform agenda, expected to improve taxpayer experience, widen the tax base, and reduce paperwork.
TaRMS comes at a critical time as Zimbabwe's informal economy, which accounts for 76.1% of total economic activity, largely goes untaxed. A World Bank report revealed that only 6% of informal sector participants pay taxes, despite the sector representing an estimated US$39.8 billion of GDP. The Reserve Bank of Zimbabwe has previously noted that the informal economy generates over US$14 billion annually.
Kelvin Banda, officer-in-charge of the AfDB's Zimbabwe country office, emphasised that improving domestic revenue collection is vital amid declining donor support and limited access to external loans. "With dwindling development assistance and donor funding, as well as increased difficulties in accessing external loans, increased domestic resource mobilisation is an essential policy mechanism," he said.
The AfDB highlighted that Africa's tax-to-GDP ratio remains below 15% for more than half of the continent's countries, significantly below the level needed to close the estimated annual financing gap of US$402.2 billion required to achieve the Sustainable Development Goals and the African Union's Agenda 2063. TaRMS is expected to contribute to narrowing this gap in Zimbabwe by improving efficiency, reducing revenue leakages, and building a sustainable foundation for economic growth.
The system, formally launched on August 18 in Harare by Finance, Economic Development and Investment Promotion Deputy Minister Kudakwashe David Mnangagwa, aims to improve transparency in tax collection, curb financial leakages, and strengthen the capacity of the Zimbabwe Revenue Authority (Zimra). The project began in 2023 and has been implemented in phases since then.
"The Tax and Revenue Management System was developed under a US$10.4 million Tax and Accountability Enhancement Project supported by the African Development Bank as part of efforts to enhance domestic resource mobilisation," the AfDB said. The bank contributed US$7 million for system design and development, while the Zimbabwean government funded hardware procurement, stakeholder training, and change management activities.
TaRMS comes at a critical time as Zimbabwe's informal economy, which accounts for 76.1% of total economic activity, largely goes untaxed. A World Bank report revealed that only 6% of informal sector participants pay taxes, despite the sector representing an estimated US$39.8 billion of GDP. The Reserve Bank of Zimbabwe has previously noted that the informal economy generates over US$14 billion annually.
Kelvin Banda, officer-in-charge of the AfDB's Zimbabwe country office, emphasised that improving domestic revenue collection is vital amid declining donor support and limited access to external loans. "With dwindling development assistance and donor funding, as well as increased difficulties in accessing external loans, increased domestic resource mobilisation is an essential policy mechanism," he said.
The AfDB highlighted that Africa's tax-to-GDP ratio remains below 15% for more than half of the continent's countries, significantly below the level needed to close the estimated annual financing gap of US$402.2 billion required to achieve the Sustainable Development Goals and the African Union's Agenda 2063. TaRMS is expected to contribute to narrowing this gap in Zimbabwe by improving efficiency, reducing revenue leakages, and building a sustainable foundation for economic growth.
Source - online
