Online Reporter
Sikhulekelani Moyo
Zimpapers Business Hub
Government has exceeded its revenue collection targets for the first half of 2025, with US dollar collections reaching US$3,68 billion against a target of US$3,28 billion.
This represents a positive variance of US$405,2 million, or 12,4 percentage, as announced by Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, during the 2025 Mid-Term Budget and Economic Review yesterday.
Prof Ncube revealed that cumulative revenue collections for January to June 2025 amounted to ZiG101.2 billion with tax revenue contributing a significant 96 percent of this total, while non-tax revenue made up the remaining 4 percentage.
Specifically, tax revenue accounted for $3,52 billion (96 percent of total revenue) against a target of $3,13 billion, while non-tax revenue contributed $161,1 million (4 percent) against a target of $150,4 million.
The country received development assistance amounting to US$148,1 mln during the first half of the year, which mainly went towards the health sector, emergency response, and education.
The Minister detailed that the major contributors to revenue collections were Value Added Tax (25,3 percent), Personal Income Tax (19,9 percent), Excise Duty (11,5 percent), Corporate Income Tax (10,3 percent) and Intermediate Money Transfer Tax (7,1 percent).
In terms of budget utilisation up to June 2025, 35 percent of the approved budget has been spent, which is below the target. The remaining balance of the budget is, therefore, adequate to cater for Government operations to year end in the absence of any significant shocks.
Despite economic pressures, the Government successfully limited the 2024 budget deficit to one percentage of GDP, amid strong revenue collections.
Professor Ncube attributed this positive performance primarily to the Government’s stance on maintaining a limited list of VAT-exempt and zero-rated products, with VAT zero-rating largely intended for exports of goods and services in line with the destination principle. Additionally, enhanced tax administration, including strengthened audits on Deemed Smuggled Goods, and improved tax compliance on 2024 revenue measures such as the Beverages Sugar Content Tax, played a key role.
Tax consultant Mr Peter Mgodi suggested that the Government should consider alternative revenue streams rather than relying so heavily on taxes, which he believes exert too much pressure on individuals and businesses.
“Other countries rely on their natural resources to earn revenue. For example, mineral and oil, gas etc, being sold by the State,” said Mr Mgodi.
“Alternatively, the Government enterprises can run profitably to earn profits for the Government. Tax revenue subsidises state enterprises.”
Meanwhile, the Minister said the 2026 fiscal year presents both opportunities and challenges for the Government as it seeks to consolidate fiscal sustainability, enhance domestic revenue mobilisation, and promote inclusive economic growth.
He stated that proposed tax-related interventions will be critical in funding key developmental programmes, notably those outlined in the National Development Strategy 2 (NDS2), supporting the ZiG currency regime, and responding to taxpayers’ concerns in an evolving economic landscape.
Specific interventions, as mentioned by Minister Ncube, will therefore target expanding the tax base to fully incorporate emerging sectors, while also implementing measures to support the formalisation of economic activities through digital and financial inclusion of SMEs.
Furthermore, the Government will implement Tax Administration Reforms focused on digitalisation and data integration, compliance, and strengthened enforcement measures in collaboration with relevant stakeholders and Government agencies, as well as legislative and regulatory reforms to reduce the cost of compliance, while also tightening loopholes that have been exploited through tax avoidance practices.
