Mthuli Unveils Plans To Broaden Tax Net

Finance Minister Mthuli Ncube has pledged to aggressively broaden the tax base by incorporating small and medium enterprises (SMEs) and closing loopholes that have been exploited through tax avoidance.

However, attempting to expand the tax base without implementing broader reforms could result in increased tax evasion, business closures, or a deepening of informality—factors that could further undermine efforts to meet gross domestic product (GDP) targets.

Presenting the 2025 Mid-Term Budget Review in Parliament on Thursday, Ncube said the government would also focus on digitalisation and data integration, improved compliance, and enhanced enforcement measures. He said:

Proposed tax-related interventions will be critical in funding key developmental programmes, notably development plans outlined in NDS 2 [National Development Strategy 2], supporting the ZiG currency regime and responding to taxpayers’ concerns in an evolving economic landscape.

Specific interventions will, therefore, target the following: Expanding the tax base to fully incorporate emerging sectors while also implementing measures to support formalisation of economic activities through digital and financial inclusion of SMEs [small and medium enterprises]; tax administration reforms focused on digitalisation and data integration, compliance and strengthened enforcement measures in collaboration with relevant stakeholders and government agencies;

And legislative and regulatory reforms in order to reduce the cost of compliance, while also tightening loopholes that have been exploited through tax avoidance practices.

Ncube said that, in response to concerns raised by taxpayers and business representative organisations, including the Chamber of Mines of Zimbabwe, the Confederation of Zimbabwe Industries, and the Zimbabwe National Chamber of Commerce, the government will continue reviewing the current tax system.

The aim is to reduce existing and perceived distortions, and to provide a supportive environment for business growth, investment, and competitiveness both locally and internationally.

He stressed that compliance with tax legislation remains essential for building a sustainable domestic resource mobilisation framework.

Ncube added that the review process is being informed by ongoing consultations with individuals, business leaders, and consumer representatives across the country.

Looking ahead, he said the government is pursuing a medium-term revenue strategy, which outlines a clear path for improving the revenue-to-GDP ratio, alongside specific measures to achieve that objective.

More: NewsDay

Related:

ZIMRA targets rental income with new tenant register requirement Govt Approves “Ease Of Doing Business” Reforms In Manufacturing And Financial Services Sectors