Your Excellency,
I write this letter to you, Mr President, as a concerned and patriotic Zimbabwean, deeply troubled by the dire state of our business environment.
When you assumed office in 2017, you declared yourself a “listening President”, a leader who understands the plight of his people and is willing to make tough decisions for the greater good of our nation.
Today, I appeal to that commitment, to that promise and to your vision for Zimbabwe as an upper-middle-income economy by 2030.
The reality on the ground is stark, Your Excellency. Businesses across Zimbabwe are struggling to survive under a crushing tax burden that is stifling growth, discouraging local investment and forcing many into the informal sector or outright closure.
We are, without exaggeration, one of the most heavily taxed nations on the face of the earth. Entrepreneurs and business owners who should be expanding, employing and innovating are instead consumed by an ever-growing list of taxes, levies and statutory obligations that leave little room for profitability or reinvestment.
Zimbabwe’s tax structure is punitive rather than enabling. It discourages entrepreneurship and suffocates established businesses. Below are some of the most pressing issues that require urgent attention:
Overwhelming tax burden
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Businesses in Zimbabwe are subject to multiple layers of taxation, including corporate tax, VAT, Pay As You Earn (PAYE), Presumptive Tax, Withholding Tax, IMTT (Intermediated Money Transfer Tax), and various sector-specific levies.
The sheer number of taxes, coupled with their high rates, makes it nearly impossible for businesses to operate competitively.
Aids levy — is it still necessary? The Aids levy, introduced in 1999, was a noble initiative when HIV and Aids was a major crisis with no accessible treatment.
However, in 2024, we live in a vastly different world where anti-retroviral (ARV) drugs are readily available, international donor support is significant and the fight against HIV and Aids is more structured than ever before.
The continued imposition of this levy, which adds an extra financial strain on already struggling businesses, must be reconsidered. Surely, other funding mechanisms for the healthcare sector can be explored instead of maintaining an out-dated levy that hampers business operations.
IMTT — The 2% IMTT has made it prohibitively expensive to move money within the economy. This tax, which affects every single electronic transaction, increases the cost of doing business and forces many into cash transactions, thereby undermining financial inclusion efforts.
At a time when 96% of Zimbabwe’s transactions are electronic and digital economies are the future, this tax discourages the very progress we need.
Import and export duties
A barrier to trade: Zimbabwe’s import duties on raw materials, machinery and essential business inputs are among the highest in the region. This makes our locally-produced goods more expensive compared to those from South Africa, Zambia and even beyond. If we want to develop our manufacturing sector, we must make it cheaper for businesses to acquire the tools and materials they need to produce competitively.
Fuel levies
Zimbabwe’s fuel is among the most expensive in the region, largely due to excessive taxation. Since fuel costs affect transport, logistics and, ultimately, the price of goods and services, reducing these levies would have a cascading positive effect on the entire economy.
Your Excellency, Zimbabwe does not need to reinvent the wheel when it comes to economic reform. Successful economies such as Dubai and Singapore have demonstrated that a low-tax, business-friendly environment attracts investment, encourages entrepreneurship and leads to sustained economic growth.
Dubai has zero corporate and personal income tax, making it a global business hub. Instead, the government raises revenue through consumption-based taxation such as VAT (at a reasonable 5%) and strategic state-owned enterprises.
Singapore maintains a low 17% corporate tax rate, has no capital gains tax, and provides tax incentives for startups and small businesses. This has led to Singapore becoming one of the world’s most competitive economies.
Zimbabwe has vast potential to become a regional economic powerhouse if we implement similar pro-business reforms. Instead of taxing businesses to death, let us lower taxes, simplify the tax system and incentivise investment.
A thriving private sector will ultimately generate more revenue for the government.
A direct appeal to your leadership
Your Excellency, we do not need complex economic theories to fix our situation — what we need is the political will to make bold, transformative decisions. Here is what I humbly propose:
Reduce corporate tax to a competitive rate of between 15-20%, similar to other business-friendly nations.
Abolish out-dated levies such as the Aids levy, which no longer serves its original purpose.
Scrap or significantly reduce IMTT to encourage formal transactions and digital payments.
Please lower import duties on essential raw materials and business inputs to enhance industrial productivity. Cut fuel levies to reduce the cost of living and doing business.
Simplify the tax system to eliminate bureaucracy and corruption, making compliance easier.
If we take these bold steps, Zimbabwe will become an attractive destination for investors, businesses will thrive, employment will rise and tax revenue will increase organically through economic expansion.
Your Excellency, the Zimbabwean business community is not asking for favours or hand-outs, we are simply asking for an environment that allows us to work, create and to build a prosperous nation. If we continue on the current path of excessive taxation, businesses will continue to close, unemployment will rise and the informal sector will overtake the formal economy.
As a leader, who has always promised to listen to the people, I urge you to hear this plea. Zimbabwe is ready for transformation and the business community stands ready to drive that transformation if only given the chance.
- Mutisi is the CEO of Hansole Investments (Pvt) Ltd. He is the current chairperson of Zimbabwe Information & Communication Technology. — +263772 278 161 or [email protected]
