Online Reporter
Tapiwanashe Mangwiro
Senior Business Reporter
CAPTAINS of industry and economic analysts have welcomed the Government’s plans to streamline taxes and reduce the cost of regulatory compliance, which continue to weigh on the operations and viability of businesses.
The Confederation of Zimbabwe Industries (CZI), economists, and other business leaders have, for long, pleaded with the Government to streamline taxes and regulatory compliance requirements to reduce the cost of doing business.
CZI chief executive officer (CEO) Ms Sekai Kuvarika said in an interview this week that the industrial lobby group was pleased with the Government’s pronouncements regarding the multiplicity of taxes and the cost of regulatory compliance.
Ms Kuvarika was reacting to reports that Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube, planned to review some of the taxes and the regulatory requirements in the next six months.
“We really believed that regulatory reform needed a step change and a directive from His Excellency as Head of State with clear time-bound targets,” she said.
Recently, Prof Ncube said: “We are undertaking a comprehensive review to streamline our tax and regulatory framework. Our objective is clear; to identify and eliminate unnecessary taxes and regulatory fees that hinder business operations.”
According to CZI, the business community has been in constant dialogue with the Government over the past few years regarding the various factors that have a bearing on the cost of doing business, which is driven by numerous taxes and the burden of regulatory compliance.
“We noticed the increase in both regulations and regulatory entities over the past 10 years and even hypothesised that in some instances, regulatory authorities may be collecting more revenue from certain companies than Treasury as they collect either on volumes produced or before production.”
In January 2025, the CZI implored the Government to implement radical deregulation measures to cut the high cost of doing business.
CZI said compliance accounted for 18 percent of total overheads, with manufacturing firms required to comply with at least nine regulatory bodies. Businesses are also dedicating significant time and resources, with an average of three full-time employees handling regulatory issues and 10 days per month spent on compliance.
The business lobby group pointed out that local businesses had to navigate 51 different taxes and regulatory fees, compared to just seven in South Africa.
To address the situation, CZI proposed a Presidential directive to cut regulatory costs by at least 70 percent by June 2025 and freeze new regulations unless they improve competitiveness.
Economic analyst Mr Tafara Mtutu said: “It is a good thing, Zimbabwe’s formal sector is laden with a lot of taxes and cutting some of those taxes and removing some altogether has a positive impact on businesses. For one, it will certainly encourage more businesses to become formal.
“Secondly, it will also help the formal sector become more competitive in comparison to the informal sector.”
Mr Mtutu believes it becomes a win-win situation, at both micro and macro levels.
Economist Gladys Shumbambiri-Mutsopotsi welcomed the Government’s plans but called for a balanced approach.
“Reducing regulatory fees and licensing costs is a positive step towards easing the cost of doing business in Zimbabwe,” she noted.
“However, the Government must ensure that in streamlining these fees, essential oversight and quality standards are not compromised. The key challenge will be maintaining efficiency in revenue collection while fostering a more investor-friendly environment.”
She also emphasised the importance of transparency in the process.
“Businesses need clarity on which fees will be scrapped and which will remain. A continued consultation process with the private sector will be crucial in ensuring these reforms have a meaningful impact.”
Economist Enoch Rukarwa believes the move will free more funds for companies to use in their operations.
“The measure will most likely induce cashflow relief for companies in the short to medium term all things being equal which can create space for reinvestment, boost profitability and overall operations,” he said.
According to Ms Kuvarika, Minister Ncube’s tax and regulatory compliance reform proposals would provide a clear and positive direction for the Zimbabwean business environment and hopefully, some changes will take much less than six months.
CZI said it considered the review of taxes and the cost of regulatory compliance a priority and the foundation for industrial transformation.
Minister Ncube emphasised the need to create a dedicated committee to oversee this reform initiative.
“We are focused on aligning our business licensing and tax requirements with international standards,” he said. “This entails reducing the number of steps and licenses required to start and operate a business.”
The industry lobby group warned that Zimbabwe risked losing investment to neighbouring countries under the African Continental Free Trade Area (AfCFTA) if issues relating to taxes and regulatory compliance are not addressed.
