ZIMRA Sets US$9.2 Billion Revenue Target For 2026

The Zimbabwe Revenue Authority (ZIMRA) is targeting to collect US$9.2 billion in revenue in 2026, a 17% increase on this year’s projected US$7.57 billion.

Speaking last week, ZIMRA board chairman Antony Mandiwanza said the target is achievable, pointing to reforms that are formalising the economy and widening the tax base. Said Mandiwanza:

“Beyond the magnitude of this figure, what is important to the Board is the quality and sustainability of the revenue base — a base that is broader, more diversified and less dependent on a few sectors.

“Looking ahead, ZIMRA’s medium-term projections — including the US$9.2 billion envisaged for 2026 and the longer-term revenue path towards 2030 — are aligned to the country’s growth aspirations under Vision 2030 and NDS 1 and 2.

“These are not just ‘big numbers’; they reflect an economy that is formalising, growing and becoming more competitive.”

However, many analysts warn that the largely informal economy, a shrinking tax base, and the closure of key companies make such an ambitious target difficult to achieve.

An investment analyst, speaking to Business Times on condition of anonymity, said:

“The target is ambitious as companies like OK Zimbabwe are still on the downward trend despite efforts being made.

“There are many firms that were heavily affected by these taxes and a difficult operating environment, hence it will take years to recover.

“So to expect an ambitious target like that at a time these firms are still recovering, and some are still starting to comply, will not be advisable.”

Investment analyst Tafara Mtutu said ZIMRA’s system upgrades have improved compliance, but success hinges on bringing the informal economy into the formal sector. He said:

“Reducing taxes alone will not be enough because, from the informal market’s perspective, zero taxes is still better than paying a lower tax.

“In my opinion, they could be more successful if they complemented their effort with an incentive-based framework.”

Economist Enoch Rukarwa said that the benefits of the reforms will be seen over the long term. Said Rukarwa:

“We do acknowledge the government’s efforts in attempting to formalise the informal sector, but when you go on the ground, you find that there’s still a long way to go.

“The benefits we may not see in the short term, but they will eventually trickle in the long haul.

“However, we continue to encourage the government to maintain consistency in the push for formalisation and creating an enabling environment that creates value for the informal sector that wants to formalise.”

Rukarwa added that, although reforms are being implemented in sectors such as transport, the US$2 billion increase is unlikely to come from the informal sector alone.

More: Business Times