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By Engineer Jacob Kudzayi Mutisi
Zimbabweans are grappling with one of the highest tax burdens in the world, facing exorbitant charges for government services that only seem to increase. In a startling turn of events, <a href="https://www.herald.co.zw/govt-launches-door-to-door-crackdown-on-smugglers/">according to The Herald</a>, the government has resorted to door-to-door inspections of imported goods, a tactic that underscores the dire financial situation the country finds itself in. When ZIMRA revenue officers begin inspecting pantries and kitchens for groceries, demanding customs duty receipts, it is clear that Zimbabwe has hit rock bottom.
Under President Emmerson Mnangagwa’s regime, the government has faced numerous challenges, not least of which is the rampant corruption that has led to the looting of public funds. This mismanagement has left the state financially crippled, forcing it to seek out increasingly bizarre and desperate measures to raise revenue. The sight of government officials knocking on doors to check for food items imported from South Africa is not just alarming, it is a stark representation of a government that has lost its way.
Imagine the scene, a government official stands at your door, requesting entry to inspect your pantry or kitchen lockers for any food that may have crossed the border. They demand to see customs receipts for items that families often rely on, sent by loved ones seeking to provide a lifeline to those back home. It is a surreal and almost comedic situation, yet it highlights the absurd lengths to which the government is willing to go to collect taxes.
Zimbabwe’s economy is plagued by the highest inflation rates in the world, which has decimated purchasing power and left many citizens struggling to meet basic needs. With very few factories producing goods domestically, many families depend on food sent from abroad, particularly from South Africa. This reliance on imported goods has now become a target for government taxation, as Mnangagwa’s regime seeks to capitalise on every avenue available to alleviate its financial woes.
The situation is made even more ironic by the fact that citizens are already heavily taxed. The country has a complex web of taxes, including income tax, value-added tax and customs duties, among others. It seems that every effort made by citizens to cope with their suffering is met with further taxation. The idea that the government would stoop to inspecting kitchens for food items is a new low, one that many Zimbabweans never thought they would witness.
Adding to the frustration is the lack of organised political opposition to challenge these absurdities. The current political landscape is fragmented, leaving citizens feeling powerless against a regime that seems more focused on squeezing every last cent from its people than addressing the underlying economic issues. The absence of a strong opposition leaves the government unchallenged in its actions, no matter how bizarre or intrusive they may be.
Zimbabwe is at a critical juncture, where the government’s desperate attempts to raise funds have led to absurd measures like door-to-door inspections of private homes. This situation reflects a broader trend of mismanagement and corruption that has plagued the country for years. As Zimbabweans continue to endure one of the highest tax burdens globally, it is evident that the government’s policies are only exacerbating the crisis, leaving citizens to wonder what will come next in this ongoing saga of economic hardship.
Tiri pama one chaiwo

Pindula News

Zimbabwe has high taxes and government officials are now going door to door to inspect groceries for tax receipts. This shows how desperate the government is for money. The president's regime is corrupt and mismanaged, leading to financial problems. The economy is struggling with high inflation and dependence on imported goods. Citizens are already heavily taxed and now face even more taxes on food items. There is no strong opposition to challenge these actions. The government's actions are making things worse for the people, who are feeling powerless against these intrusive measures.

ZIMRA Door to Door Inspections: Our Government Cannot be That Desperate

The Zimbabwe Revenue Authority (ZIMRA) has ordered business owners in the construction, iron, and steel industries to register for tax purposes. Failure to comply may result in a fine of US$15,000 or the closure of their businesses.
In a public notice, ZIMRA announced plans to visit stakeholders in these industries to ensure compliance with all applicable tax categories.
According to ZIMRA, Construction Industry Stakeholder players include Construction companies, Building contractors, Surveyors, Civil Engineers, Electrical Engineers, Architectures, Land developers, Carpenters, plumbers, painters, Iron &amp; Steel, Foundries/Formers, Metal Related Products Consultancy/Services, Hardware, Brick moulding companies including products of cement Cement manufacturing companies, Iron and Steel manufacturing companies, Timber producers and retailers Electrical manufacturers, Quarry product producers, Machine Shops/Metal Workshops/Fabricators Iron &amp; Steel Merchants/Agents/Distributors, and Other construction related services. ZIMRA said:
<blockquote>
ZIMRA kindly reminds all taxpayers to submit any outstanding returns as soon as possible. Timely submission of returns and payments helps you to avoid penalties, interest and litigation. By staying compliant, you contribute to building a stronger and more sustainable economy.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

ZIMRA wants businesses in construction, iron, and steel to pay taxes. If they don't, they may need to pay $15,000 or close down. ZIMRA will check if they are following tax rules. Businesses like construction companies, engineers, and steel manufacturers must register. ZIMRA says to submit tax returns on time to avoid problems. It's important to pay taxes to help the economy.

ZIMRA Moves To Enforce Tax Compliance In Construction, Iron, And Steel Industries

Finance Minister Mthuli Ncube has announced a new 0.5% tax on the sales value of several fast foods, effective from January 1, 2025.
In his presentation of the 2025 National Budget at the New Parliament in Mt Hampden on Thursday, Ncube said the tax aims to encourage food operators to adopt healthier culinary practices and promote better eating habits. He said:
<blockquote>
The consumption of highly processed food has been identified as one of the factors responsible for the prevalence of obesity and associated non-communicable diseases, hence, the need for Government to promote responsible consumption of such foods.
In view of the above, I propose to introduce a Fast Foods Tax on the value of the following food items sold by Fast Food Retail Outlets and Restaurants at a modest rate of 0.5% on the sales value, with effect from 1 January 2025.
</blockquote>
The fast foods listed by Ncube are Pizza, Burger and Hot dogs, Shawarma, French fries, Chicken, Doughnuts and similar products, and, Tacos.
Ncube also introduced a 10 per cent withholding tax on gross winnings by sports betting punters. He said:
<blockquote>
Sports betting punters currently receive income from winnings, which is not taxable under Personal Income Tax. To include punters in the tax base, I propose to introduce a 10% withholding tax on gross winnings, effective 1 January.
</blockquote>
Since he was appointed Finance Minister following the November 2017 military coup, Ncube has introduced several controversial taxes that have further strained the financially burdened Zimbabwean population.
While the government’s intention behind imposing taxes on fast foods and sports betting winnings is to broaden the tax base, over-taxation can have several detrimental effects on both the economy and society.
High tax rates can discourage individuals and businesses from investing, working, or expanding their activities, ultimately reducing economic growth and productivity.
Additionally, when people face heavy taxation, they have less disposable income to spend on goods and services, which can dampen consumer spending and negatively impact businesses.
Furthermore, an over-reliance on high taxes for revenue can result in inefficiencies in government spending and a lack of fiscal discipline, as there may be fewer incentives to manage public funds responsibly.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Finance Minister Mthuli Ncube is putting a new tax of 0.5% on fast foods like pizza starting in 2025. He also wants to tax sports betting winnings by 10%. These new taxes are meant to make people eat healthier and expand the tax collection. But too many taxes can hurt the economy. People might not want to invest or spend money if taxes are high. The government might also spend money poorly if they rely too much on taxes. It's important to balance taxes so they help the country grow without hurting the people.

Mthuli Ncube Announces New Tax On Pizza And 10% Levy On Sports Betting Winnings

The government plans to mandate that most taxes and fees be paid exclusively in Zimbabwe Gold (ZiG) currency to increase demand and stabilise its value.
This was said by Finance, Economic Development and Investment Promotion Minister Mthuli Ncube during a dialogue with development partners in Harare on Wednesday. Said Ncube:
<blockquote>
Already, customs duties are now payable in local currency. Going forward and in line with the de-dollarisation roadmap, other taxes will also be paid exclusively in local currency, including payment for government services.
</blockquote>
However, most Zimbabweans believe that confidence in the ZiG currency would increase if essential items like fuel and services such as passport fees were payable in the local currency.
According to Reserve Bank of Zimbabwe (RBZ) governor John Mushayavanhu, the ZiG is supported by US$450 million in foreign reserves as of October 10, 2024.
Since its introduction in April, the ZiG has depreciated from US$1: 13.5616 to US$1: 26.6718 as of October 16.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The government wants people to pay taxes and fees in Zimbabwe Gold (ZiG) to make the currency stronger and more valuable. Finance Minister Mthuli Ncube said this during a meeting. Right now, only customs duties can be paid in local currency, but soon all taxes may be paid that way. People want essential things like fuel and passport fees to also be paid in ZiG. The currency is supported by $450 million in reserves. Since it started, ZiG's value has gone down. The government hopes this change will help the economy.

Taxes And Fees To Be Paid Exclusively In ZiG - Mthuli

The Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, has said companies should pay Corporate Income Tax in proportion to the currency used for trade.
In a statement issued this Wednesday, June 19, on the payment of the 2024 second quarter corporate income tax, Ncube said if a company exclusively transacts in local currency, tax shall accordingly be paid in local currency (ZIG). Reads the statement:
<blockquote>
PAYMENT OF SECOND QUARTER CORPORATE INCOME TAX
The Zimbabwean economy has demonstrated relative stability in recent months following the presentation of the Monetary Policy Statement by the Reserve Bank Governor on 5 April 2024 and the successful transition from the Zimbabwe Dollar to the Zimbabwe Gold (ZIG).
The more stable economic environment ushered in by the new Zimbabwe Gold currency has had a positive impact on the economy. Government is pleased by the acceptance of the same by economic agents and the general public.
Against this background, coupled with the need to maintain this positive economic trajectory, Treasury is stepping up to complement the Fiscal and Monetary Policy Framework aimed at further anchoring the currency, exchange rate and price stability.
I therefore wish to advise that Treasury is currently working on a comprehensive review of the Framework of Tax Payments to:
<ul>
<li>Ensure a seamless transition from exclusive payment of taxes in the currency of trade to local currency:</li>
<li>Re-align the legislative requirements, in particular, where the currency of trade is specified in Principal Legislation;</li>
<li>Set the current ratios of transactions in local and foreign currency, and, Minimise economic shocks associated with abrupt policy changes.</li>
</ul>
Cognisant of the above, I wish to advise that payment of Corporate Income Tax should be guided by the provisions of Section 4A of the Finance Act (Cap. 23:04], which provides for payment of tax in the equivalent proportion of the currency of trade.
For example, if a company exclusively transacts in local currency, tax shall accordingly be paid in local currency (ZIG).
Similarly, where a corporate transacts in the ratio of 60%-40%, that is, local and foreign currency respectively, Corporate Income Tax should, accordingly, be accounted in the same ratio.
However, notwithstanding the current legislative provisions, Treasury authority is hereby granted for corporates to account for the 2024 Second Quarter Corporate Income Tax obligations in both local and foreign currency on a 50:50 basis.
Corporates that have already paid tax for the 2 Quarter, in accordance with the current legal provisions are advised that the Commissioner General of the Zimbabwe Revenue Authority is hereby authorised to manage such transactions on an administrative basis as guided by the law.
I am also pleased to advise that business and the general public have the option to pay Government fees and charges in local currency, unless where specified to the contrary.
Additionally, customs duty on imported goods is payable in local currency, except for designated foreign currency dutiable non-essential or luxury products.
As part of the comprehensive review of the Framework of Tax Payments, Treasury will, in due course, specify the taxes which will exclusively be payable in local currency, and the necessary supportive legislation, with the requisite approval by Parliament.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Companies To Pay Tax In Proportion To The currency Used For Trade - Mthuli

The Government has raised the monthly tax-free income tax threshold to about Zimbabwe Gold (ZiG)1 356.
This comes after the Zimbabwe dollar (ZWL), which was replaced by ZiG this month, had depreciated sharply during the first quarter of the year.
As reported by <a href="https://www.newsday.co.zw/local-news/article/200026166/govt-revises-tax-free-income-tax-threshold">NewsDay</a>, the depreciation meant that the monthly tax-free income tax threshold, at ZWL750 000, translated to US$28,39 at the end of the quarter, way below the cost of living.
This drop was from the US dollar/Zim dollar equivalent of nearly US$74, at the end of January 2024, when the tax-free income tax threshold of ZWL750 000 came into effect.
On Friday, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, issued Statutory Instrument (S.I.) 74 of 2024, stating that the monthly tax-free income tax threshold is ZiG1 356, about US$100.
This figure was calculated from the figure of ZiG12 204 as stated in the SI covering the period April 5 2024 to December 31 2024.
The S.I. says those earning between ZiG12 204,01 to ZiG36 612, over the same period, would attract a 20% income tax.
Those earning between ZiG36 612,01 to ZiG122 040 will attract a 25% income tax, ZiG122 040,01 to ZiG244 080 (30%), ZiG244 080,01 to ZiG366 120 (35%), and ZiG366 120,01 and above (40%).
In monthly terms, this translates to between ZiG1 356,01 to ZiG4 068 for the 20% income tax, ZiG4 068,01 to ZiG13 650 (25%), ZiG13 650,01 to ZiG27 120 (30%), ZiG27 120,01 to ZiG40 680 (35%), and ZiG40 680,01 and above (40%).
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Govt Raises Tax-free Income Tax Threshold

National Patriotic Front (NPF) spokesperson Jealousy Mawarire says President Emmerson Mnangagwa’s Government does not serve the interests of the public after Finance Minister Mthuli Ncube’s proposal in the 2024 National Budget to introduce new taxes.
Posting on X, Mawarire said the proposal to introduce a wealth tax is “silly”, adding the Government should find science-based solutions to challenges faced by Zimbabweans instead of making life harder for them. He said:
<blockquote>
If our government and its officers like Mthuli Ncube sought to “serve the interests of the public” and govern the country for the people, we were NEVER going to have absurd proposals to increase taxes on our impoverished citizens, instead, we were going to witness moves that reduced the burden of over-taxation on our poor citizens.
If @edmnangagwa wanted to govern the country “for the people”, silly proposals to reintroduce colonial hut taxes by different names, would never have been entertained.
What a people-centric presidency would have done was to advance policies which seek to develop the country scientifically, providing science-based solutions to our current problems rather than compounding our troubles through anti-people policies.
A president who serves the people would have taken President Xi’s 14th principle, “crackdown on corruption with zero tolerance” rather than promoting &amp; being at the centre of it.
If we are looking East, we certainly should be copying some of the principles that are aimed at growing China into a “world player”.
It’s never bad to learn from others &amp; the growth of the Chinese economy in the last 2 decades cannot be ignored.
</blockquote>
Ncube said the wealth tax will be levied at a rate of 1% of market values of residential properties with a minimum value of US$100 000.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Mawarire Criticises Mthuli Ncube's "Absurd" Tax Proposals

The Government is targetting informal traders for taxation in a bid to increase revenue and also over fears that as the economy becomes more dollarised, the tax base could decrease by 25 percent as the informal sector fails to pay tax.
Zimbabwe’s economy is largely informal, and as a result, the country’s tax collection agency, the Zimbabwe Revenue Authority (ZIMRA) faces several challenges in raising revenue to fund the Government’s operations.
<a href="https://businesstimes.co.zw/tax-dragnet-closes-in-as-govt-targets-informal-traders/">Business Times</a> reported Treasury sources as saying the fiscal authorities were targetting foreign-owned shops among several strategies to broaden the tax base. Said a source:
<blockquote>
The government has a programme that is targeted towards compliance with reserved sector regulations with particular attention to foreign-owned shops in the downtown area.
Those that have not complied are duly required and requested to comply with the law.
Definitely, this will increase tax revenue into fiscus while reducing a lot of illicit transactions that have also been taking place in that area.
</blockquote>
In his mid-term budget strategy paper, the outgoing Minister of Finance and Economic Development, Mthuli Ncube, said the Government will devise various strategies to increase its tax base. He said:
<blockquote>
Achieving the target collections is underpinned by tax administration initiatives that enhance enforcement and tax compliance, in particular, of business processes and adoption of new technology, among other initiatives.
Expansion of the base through embracing emerging industries, including those in the informal sector, as well as capturing the digital marketplace where sellers and buyers of goods and services converge through e-platforms will ensure that eligible taxpayers contribute towards national development.
</blockquote>
The president of the Confederation of Zimbabwe Retailers Denford Mutashu told Business Times that the integration of informal traders into the economy was a welcome development.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Govt Targets Informal Sector To Broaden Tax Base

Finance and Economic Development Minister <a href="https://pindula.co.zw/Mthuli_Ncube">Mthuli Ncube</a> said that the Government is set to review the salary tax bands to reverse the erosion of incomes and increase consumer purchasing power.
This comes amid reports that the Government will soon award civil servants a salary hike in Zimbabwe dollars.
Speaking in an exclusive interview with <a href="https://www.sundaynews.co.zw/more-usd-for-civil-servants-government-to-adjust-salary-tax-bands/">The Sunday News</a>, Ncube said the Government will soon review upwards the tax bands to restore consumer purchasing power. He said:
<blockquote>
One of the issues that we need to do to support our citizens is the tax that they are paying given the high levels of inflation.
Inflation has gone up but the tax bands have not moved and it is an issue that we are looking into as government.
I will be issuing an announcement soon to move the tax bands upwards so as to give relief to citizens or employees because of high inflation. We are on to it.
This will go a long way in making sure the Zimbabwean dollar can buy more and ensure at least an individual has more money to spend in the shops.
We intend to do this every year where we move the bands upwards.
One of the things that we also did was to lower the Intermediated Money Transfer Tax (IMTT) for USD transactions.
So, all that will go a long way in giving citizens more money and transacting more cheaply.
We are not trying to change the tax rate for each band but we are moving the minimum threshold upwards and that is all we are doing, but the tax rate stays the same for each band.
So, this is really meant to give relief to those employees who are at the bottom end of the employment scale.
</blockquote>
Confederation of Zimbabwe Retailers (CZR) president, Denford Mutashu, said:
<blockquote>
Moving the tax bands upwards will provide the necessary relief to the public as inflation bites, eroding purchasing power, especially in local currency.
It will create demand but CZR urges Government to introduce all measures that contain money supply and speculation.
</blockquote>
Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU) spokesperson David Dzatsunga said:
<blockquote>
The measure to review tax bands can only make a difference if accompanied by a substantial upwards adjustment of salaries that restores the value that was there and is being lost due to the exchange rate movement.
</blockquote>
On Friday, Treasury announced that corporate tax payments will be made in the local currency as a measure to promote the use of the Zimbabwean dollar in the economy.
In a statement, Treasury said to further promote the use of the Zimbabwean dollar, for the June 2023 Quarterly Payment Date, taxpayers will be required to settle 50% of the foreign currency portion of their corporate tax obligations in local currency.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Government To Review Salary Tax Bands - Mthuli Ncube

The recent move by the Government to suspend import duty and import value-added tax (VAT) on selected groceries is something Zimbabweans have become familiar with as it happened exactly 12 months ago.
The suspension was lifted in late November 2022, which means it has taken the Government just six months to reverse its decision amid soaring prices and a runaway exchange rate.
On Friday, 12 May, the Government suspended import duty and import value-added tax (VAT) on 11 basic grocery items: maize meal, rice, milk, flour, sugar, salt, cooking oil, petroleum jelly, toothpaste, bath soap and washing powder.
The suspension of the import duty and import VAT shall be valid for six months from 12 May 2023.
The development evokes a sense of déjà vu as similar measures to address rampant price increases were put in place in May 2022.
In May last year, Ministry of Finance and Development permanent secretary George Guvamatanga directed Zimbabwe Revenue Authority (ZIMRA) then acting Commissioner-General Regina Chinamasa to suspend duty on selected products for a period of six months with effect from 17 May 2022. Wrote Guvamatanga:
<blockquote>
Reference is made to the press statement by the Minister of Finance and Economic Development where a pronouncement was made regarding the introduction of measures aimed at ensuring access to affordable basic commodities, in view of the recent substantial increases in prices of locally manufactured products.
In view of the above, Zimbabwe Revenue Authority is hereby authorised to suspend duty on the following products for a period of six months with effect from May 17, 2022.
</blockquote>
Rice, flour, cooking oil, margarine, salt, sugar, maize meal, milk powder, infant milk formula, tea (whether or not flavoured), petroleum jelly, toothpaste, bath soap, laundry bar were to be imported duty-free.
Finance and Economic Development Minister Mthuli Ncube scrapped the suspension of import duty when he presented the 2023 national budget on 24 November 2022.
In his budget presentation at the New Parliament Building in Mt Hampden, Ncube said:
<blockquote>
Mr speaker sir, the government suspended customs duty on basic commodities in order to cushion consumers from unjustified price increases, this measure has contributed to stability in prices of basic commodities, hence the suspension which expired on November 16, 2022 will not be extended.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Six Months Ago Govt Re-imposed Duty On Basic Groceries

Renowned economist Gift Mugano has commended Treasury for allowing businesses to keep 100% of their locally generated forex revenue.
Speaking to <a href="https://www.newsday.co.zw/thestandard/business/article/200011510/it-will-not-work-industry-tells-ncube">The Standard</a>, Mugano a professor of economics, however, said the removal of import duty on 11 selected products will expose the local industry while draining foreign currency from the country. He said:
<blockquote>
The move by the government to open the borders for basic commodities under the argument that they want to push improvement and availability of basic commodities; I don’t think it’s a good one.
It clearly exposes our local industry and it becomes a significant drainer of foreign currency because we are allowing unrestricted draining of foreign currency to import goods.
My view on this: I think the government is being emotional about the current price spike.
The tragedy is that the price hikes will continue because local manufacturers will be forced to charge Zimdollar and United States dollars in the shops as required by law, but those who are going to import commodities, particularly cross border will not charge in Zimbabwean dollars.
This will further deepen dollarisation and use of United States dollar because they need foreign currency to be able to go back and import again.
</blockquote>
According to The Standard, the Zimbabwean dollar fell to $2 700 against the United States dollar from about $1 200 a week ago.
But officially, during the same period, the Zimbabwe dollar fell to $1 222.27, against the greenback.
The depreciation of the local unit has led businesses to increase prices to preserve the value of goods and services, thereby making a recent 100% salary increment for civil servants meaningless.
In fact, some commentators say civil servants were better off before the salary increment in April than they are at present as far as their earnings in local currency are concerned.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

"Removal Of Import Duty On Groceries Will Expose Local Industry And Drain Forex"

The Government on Friday suspended import duty and import value-added tax (VAT) on 10 basic grocery items: maize meal, rice, milk, flour, salt, cooking oil, petroleum jelly, toothpaste, bath soap and washing powder.
The suspension of the import duty and import VAT shall be valid for six months from 12 May 2023.
The Permanent Secretary for Finance and Economic Development George Guvamatanga has since directed Zimbabwe Revenue Authority (ZIMRA) Commissioner General Regina Chinamasa, to “urgently draft the necessary legal instrument and implement the duty suspension with effect from 12 May 2023”. Wrote Guvamatanga:
<blockquote>
Furthermore, the Ministry of Industry and Commerce is expected to complement the measure through the inclusion of the above goods on the Open General Import Licence.
</blockquote>
The move is in line with the measures announced by Finance and Economic Development Minister Mthuli Ncube on Thursday.
Among other things, Ncube said retailers and wholesalers can now keep all the foreign currency they collect from customers.
The announcement came after shops hiked prices of basic food items in response to the rapid weakening of the Zimbabwe dollar against other currencies.
The removal of import duty on products can result in lower prices for consumers and improved access to goods.
However, removing import duty may also have some negative effects such as loss of government revenue, adverse effects on domestic industries, and dependency on foreign producers.
Meanwhile, in a statement on released on Friday, Buy Zimbabwe chairperson Munyaradzi Hwengwere said the Government’s decision to scrap import duty on basic grocery items will leave the local manufacturing industry vulnerable to cheap imports.
Buy Zimbabwe called for an emergency meeting with wholesalers and retailers to map a way forward.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

List Of Duty-free Grocery Items Released

Finance and Economic Development Minister Mthuli has proposed to raise value-added tax (VAT) from the current 14.5 percent to 15 percent with effect from 1 January 2023.
Presenting his ZWL$4.2 trillion (about US$6.5 billion) budget on Thursday, at the new Parliament building in Mt Hampden, near Harare, Ncube said on average, SADC countries charge 16 percent VAT. He said:
<blockquote>
Zimbabwe charges a comparatively lower rate of 14.5 percent. The VAT rate was reduced from 15 percent with effect from January 1, 2020, in order to support households during the peak period of the COVID-19 pandemic… I propose to reinstate the VAT rate to the previous rate of 15 percent with effect from January 1, 2023.
</blockquote>
Consumers pay VAT when they buy food, and pay for water, electricity, and other services.
Ncube also removed the suspension of duty on basic food items such as rice, maize meal, bath soap, cooking oil and maize meal amongst others. He said:
<blockquote>
The suspension of duty, which expired on November 16, 2022, will not be extended.
The government will, however, monitor prices of basic commodities with a view to ensuring responsible pricing and affordability, failure of which the suspension will be reinstated.
</blockquote>
Ncube, however, said he was reducing the Intermediate Money Transfer Tax (IMTT) on domestic foreign currency transfers from 4 percent to 2 percent.
Meanwhile, former Finance Minister Tendai Biti described the restoration of duties on basic commodities particularly while approaching a festive season as “equally sadistic and bankrupt.” | <a href="https://www.zimlive.com/2022/11/ncube-raises-vat-restores-duty-on-basics-in-sadistic-and-bankrupt-2023-budget/">ZimLive</a>

Ncube Raises VAT, Restores Duty On Basic Food Items

Finance and Economic Development Minister, Mthuli Ncube has proposed to reduce the Intermediated Money Transfer Tax from 4% to 2% on foreign currency transactions.  
Analysts had called for the removal of the “regressive tax” to “alleviate the huge tax burden.”
However, in his 2023 Budget presentation delivered at the newly built multi-million dollar Parliament Building located in Mt Hampden, Ncube said the tax had been raised. He said:
<blockquote>
In order to promote use of the banking system, I propose to align the IMTT on foreign currency transactions to local currency transactions at a rate of 2%
This measure takes effect from 1 January 2023. In addition, the government will consider reviewing other measures to strengthen the foreign currency system, including the 20% surrender requirement for domestic foreign currency transactions
<h2>Exempt Transactions </h2>
In order to mitigate against higher wheat prices and consequently the price of bread and other wheat products, I propose to exempt from IMTT, the transfer of funds to farmers, for the purchase of wheat by private off-takers approved by the Agricultural Marketing Authority, for the period 1 September 2022 to 31 March 2023.
</blockquote>
<h2>More Pindula News</h2>

2023 Budget: Minister Ncube Reduces Intermediated Money Transfer Tax By 50%

The Zimbabwe National Chamber of Commerce (ZNCC) has urged the Finance and Economic Development Ministry to adjust the cigarette tax regime.
This comes amid indications that the country is losing US$248 million annually to illicit cigarette deals owing to a mixed taxing regime that benefits cartels at the expense of industry players.
Finance Minister Mthuli Ncube recently increased excise duty on cigarettes to 25% + US$5/1000 from 20% + US$5/1000 cigarettes saying it was a regional benchmark and the move will curb illicit flows.
In its latest report, the Zimbabwe National Chamber of Commerce (ZNCC) implored Treasury to do away with the ad valorem rate of 25% and remain with the specific rate. It said:
<blockquote>
We request that the Ministry of Finance and Economic Development remove the ad valorem rate of 25% and remain with the specific rate of US$16 per mile of cigarettes.
The ad valorem component is subject to manipulation and is a huge cost as production increases.
The estimated fiscal benefit from this proposed move is US$248m per annum based on the current production rate and the prospects of future production once it is removed.
We also strongly urge the Ministry of Finance and Economic Development to put in place a predictable cigarette excise duty regime.
</blockquote>
The Confederation of Zimbabwe Industries (CZI) also called for the removal of the current mixed excise duty on cigarettes. CZI said:
<blockquote>
CZI recommends that there is a need to migrate from the current mixed excise duty regime for tobacco to a specific excise duty regime, which brings certainty to investors while also maintaining revenue inflows for the government as well as eradicating illicit cigarette markets.
The current ad valorem excise duty is prone to manipulation by cigarette companies through falsification of ex-factory prices or controlling sales transactions with third parties so that the ex-factory price is lowered to reduce the excise amount.
</blockquote>
Meanwhile, ZNCC has called on the government to provide tax relief to the sector as the wider economy recovers from the COVID-19 pandemic. | <a href="https://businesstimes.co.zw/zim-loses-us248m-to-illicit-cigarette-deals/">Business Times</a>

Zimbabwe Loses US$248 Million To Illicit Cigarette Deals

Members of Parliament across the political divide have rejected Finance and Economic Development Minister, Mthuli Ncube’s proposal to criminalise non-payment of taxes, saying civil penalties should remain in place.
The matter came up during a debate on the Finance Bill in the National Assembly on Thursday.
The legislators argued that Clause 22, in which Ncube proposes the imprisonment of individuals who default on tax obligations, has no place in Zimbabwe.
Dzivaresekwa MP, Edwin Mushoriwa (MDC Alliance), said:
<blockquote>
The basis upon which we disagree with this provision is that paying tax is a civil matter.
It is wrong to criminalise someone who has failed to pay his/her tax. It is wrong to send someone to prison primarily because you have taken it as a criminal matter.
You will note that in terms of taxation in this country, everybody knows that as Zimbabweans, we are one of the most highly taxed people in the world.
</blockquote>
Buhera South MP, Joseph Chinotimba (ZANU PF), argued that some employers are struggling to pay taxes and sending them to jail would be counterproductive. Said Chinotimba:
<blockquote>
It is very painful for us as blacks in our lives. What it means is that your employer may delay to give you a salary but it becomes your fault at the end of the day.
The sentence is just too much, two years in jail is not practical. I think the Minister needs to re-visit and make it a civil case and not make it a criminal offence for failing to pay taxes.
Some of us as employers are struggling to pay those taxes. If you send them to jail, we would have destroyed many families because of one person.
</blockquote>
Harare East MP Tendai Biti (CCC) also said the criminalisation of failure to pay tax is “very regrettable.” Biti said:
<blockquote>
It is very wrong, particularly Value Added Tax which is what we are talking about.
Value Added Tax is paid on the sale of goods or services and you know that for the majority of our business in Zimbabwe, we actually operate on the basis of invoices that you issue out. 
Once you issue an invoice, then you wait for your customers or your clients to pay as Hon. Chinotimba stated.
The law now says because we use an accrual system of accounting, the obligation to pay VAT does not arise on the payment of the invoice.
The obligation to pay VAT arises upon the levying of the invoice. It is immediate.
</blockquote>
Biti added that businesses are not paying VAT not because they don’t want to but because their customers have not paid hence non-payment of tax should not be criminalised. | <a href="https://cite.org.zw/mps-reject-proposal-to-jail-tax-defaulters/">CITE</a>

MPs Reject Proposal To Jail Tax Defaulters

The Zimbabwe Christian Ministers Association, Bulawayo Province coordinator has approached Zimbabwe Revenue Authority (ZIMRA) officials seeking clarity on the taxation criteria used to define churches viewed as operating business entities.
ZIMRA officials said only employees of churches will be subjected to pay tax as pay as you earn while those operating as businesses by selling paraphernalia or all other businesses are subjected to vat. Taxation will exclude tithes, offerings and donations.
More: <a href="http://www.zbc.co.zw/2017/10/26/clerics-engage-zimra-over-taxation-criteria/">ZBC</a>

Pastors approach Zimra over taxation of churches

The Zimbabwe Union of Drivers and Conductors (ZUDAC) has decried the introduction of a new presumptive tax of $45 per month. <a href="http://www.pindula.co.zw/news/2017/03/28/government-introduces-taxes-hairdressers-kombis-cross-borders-driving-schools-taxi-cabs/" target="_blank">The government recently introduced a new presumptive tax system which targets mainly the informal system</a>. ZUDAC said the tax system would put additional pressure on drivers due to the uneven playing field. They cited factors such as illegal tax operators (mshika-shika).
ZUDAC chairperson Mr Fradreck Maguramhinga yesterday said:
<blockquote>As ZUDAC we are not in support of the introduction of this new tax that Government has imposed on kombis.
We have so many other monies being paid to enable us to operate on a day-to-day basis, hence the introduction of this tax will increase the burden,
…For those kombis following the correct channel of being in the ranks, they rarely have three trips a day, which is not sustainable..</blockquote>
Yesterday, <a href="http://www.pindula.co.zw/news/2017/04/05/govt-reverses-10-percent-tax-tobacco-farmers-threaten-boycott-selling/" target="_blank">the government recently scrapped the 10 percent duty on tobacco farmers after the farmers threatened not to sell their crop</a>
More: <a href="http://www.herald.co.zw/kombi-operators-against-new-tax/">Herald</a>

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