Online Reporter
Tapiwanashe Mangwiro
THE African Development Bank (AfDB) is confident that Zimbabwe’s new revenue management system will significantly enhance domestic revenue mobilisation and improve the country’s tax-to-gross domestic product (GDP) ratio from 18 percent in 2025 to 22 percent by 2030.
This development comes against a backdrop of historically low public revenues compared to regional peers, which has constrained the Government’s capacity to fund essential services and development initiatives.
Recent data indicates that Zimbabwe’s tax-to-GDP ratio remains below target, partly due to the rebasing of GDP figures for 2024.
The drive to raise tax-to-GDP ratios is in line with broader continental trends. Across Africa, public revenues have stagnated amid sluggish global growth and challenging macroeconomic conditions. More than half of African countries record average tax-to-GDP ratios below 15 percent.
Kelvin Banda, officer-in-charge of the AfDB’s Zimbabwe office, underscored the broader significance in a recent statement:
“With dwindling development assistance and donor funding, as well as increased difficulties in accessing external loans, increased domestic resource mobilisation is an essential policy mechanism to assist African countries in addressing their specific development challenges,” he said.
The AfDB estimates that the median African tax-to-GDP ratio must rise to at least 27,2 percent to bridge the annual financing gap of US$402,2 billion required to meet the Sustainable Development Goals and the African Union’s Agenda 2063.
In response to these challenges, Zimbabwe has launched the Tax and Revenue Management System (TaRMS), an online platform designed to simplify, accelerate, and enhance transparency in tax compliance.
TaRMS is part of the US$10.4 million Tax and Accountability Enhancement Project, which includes a US$7 million grant from the AfDB.
The initiative also involved extensive training for Zimbabwe Revenue Authority (Zimra) staff and external stakeholders, along with change management activities to ensure a smooth transition to the new system.
Zimbabwe has set an ambitious revenue target of US$7,2 billion for 2025. Zimra Commissioner General Regina Chinamasa recently informed Parliament that by mid-year, the authority had already collected US$3,21 billion, surpassing the interim target of US$3,13 billion.
Despite these gains, operational constraints persist. Legacy debts, estimated at around US$800 million, continue to limit Zimra’s flexibility, making efficiency improvements a top priority.
The impact of TaRMS is already evident. Revenue from new taxpayers rose by 238 percent in 2024 — the first full year following the system’s rollout — compared to 2023.
By reducing paperwork, speeding up processing, and clarifying compliance requirements, TaRMS is expected to broaden the tax base and curb revenue leakages, making it easier for compliant businesses and individuals to meet their obligations.
TaRMS represents a pivotal step in modernising Zimbabwe’s tax administration and supporting the Government’s broader economic objectives. By improving efficiency, transparency, and the taxpayer experience, the system is expected to accelerate domestic resource mobilisation and help Zimbabwe meet both its social and economic commitments.
For ordinary citizens, a more effective tax system translates into better-funded public services, improved infrastructure, and a stronger, more resilient economy. As the nationwide rollout of TaRMS continues, it marks a significant milestone in the country’s journey towards sustainable, citizen-centred development.
According to economist Gladys Shumbambiri-Mutsopotsi, improving the tax-to-GDP ratio is vital for the public.
“A robust tax base allows the government to fund critical public services like healthcare, education, and infrastructure,” she said. “When more citizens and businesses contribute fairly, resources are available to improve daily living standards and create economic opportunities for all.”
Ms Shumbambiri-Mutsopotsi also emphasised that while tax collections should naturally grow alongside the economy, expanding the taxpayer base is equally essential to achieving the desired ratio.
