Zimbabweans, reeling from protracted economic problems, are among the most taxed people in the world.
This is now one of the grievances which war veterans have raised in calling for the March 31 protests to remove President Emmerson Mnangagwa from power.
The country has a complex and burdensome tax system, with multiple taxes and levies imposed on individuals and businesses, as Mnangagwa’s economic adviser Eddie Cross says in this recent video.
Finance minister Mthuli Ncube’s recent taxes contribute to the high tax burden in Zimbabwe and include:
Income Tax: Zimbabwe has a progressive income tax system, with tax rates ranging from 20% to 40%.
Value-Added Tax (VAT): VAT is levied at a rate of 14.5% on most goods and services.
Pay-As-You-Earn (PAYE): Employees are required to pay PAYE, which is deducted from their salaries.
National Social Security Authority (NSSA) Contributions: Employers and employees are required to contribute to NSSA, which provides social security benefits.
Zimbabwe Revenue Authority (ZIMRA) Levies: ZIMRA imposes various levies on goods and services, including customs duty, excise duty, and carbon tax.
The high tax burden has been exacerbated by the country’s economic challenges, including inflation, currency fluctuations, and a large informal economy.
Ncube has introduced several new taxes to raise revenue and fund the government’s expanding requirements, including buying luxury cars and funding foreign trips.
Some of the most recent taxes imposed include fast-foods, which has been met with criticism from industry players.
There is the Minimum Domestic Top-Up Tax aimed at ensuring large multinational enterprises pay a minimum Corporate Income Tax rate of 15%.
And then there is also the lithium levy. The Betting Tax targets betting activities, aimed at raising revenue from the growing gaming industry.
A tax on carbonated beverages, purportedly at promoting healthier lifestyles and raising revenue was also imposed.
Additionally, Ncube has also revised the tax bands and thresholds, providing some relief to taxpayers.
The new tax-free threshold is ZiG2 800 per month, while those earning between ZiG2 801 and ZiG8 400 will pay 20% tax on income.
According to the International Monetary Fund, Zimbabwe’s tax-to-GDP ratio is among the highest in Africa, at around 27%.
This has led to widespread criticism from taxpayers, businesses, and economists, who argue that the tax system is stifling economic growth and increasing poverty.
