Online Reporter
Tapiwanashe Mangwiro
THE African Development Bank is confident that Zimbabwe’s new revenue management system will drive domestic mobilisation and enhance the country’s tax-to-gross domestic product ratio from 18 percent in 2025 to 22 percent by 2030.
This comes as public revenues have historically lagged behind regional peers, limiting the Government’s ability to fund essential services and development projects.
Recent statistics show that Zimbabwe’s ratio remains below its target, partly due to the rebased GDP figures for 2024.
The push to increase tax-to-GDP ratios aligns with broader trends across the continent. Across Africa, public revenues have experienced stagnation amid weak global growth and challenging macroeconomic conditions.
More than half of African countries have average tax-to-GDP ratios below 15 percent.
AfDB Zimbabwe officer-in-charge Kelvin Banda highlighted the wider implications in a recent statement.
“With dwindling development assistance and donor funding, as well as 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.
AfDB estimates that the median African tax-to-GDP ratio should rise to at least 27,2 percent to close the annual financing gap of US$402,2 billion required to meet the Sustainable Development Goals and the African Union’s Agenda 2063.
To address these challenges, Zimbabwe introduced the Tax and Revenue Management System (TaRMS), an online platform designed to make tax compliance simpler, faster and more transparent.
Part of the US$10,4 million Tax and Accountability Enhancement Project, TaRMS was also funded from a US$7 million grant from the AfDB.
The initiative also included extensive training for Zimbabwe Revenue Authority (ZIMRA) staff and external stakeholders, alongside 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 told Parliament that by mid-year, ZIMRA had already collected US$3,21 billion, surpassing the interim target of US$3,13 billion.
Despite these gains, operational constraints remain, with legacy debts estimated at around US$800 million continuing to limit ZIMRA’s flexibility, making efficiency improvements a top priority.
The impact of TaRMS is already evident as revenue from new taxpayers increased by 238 percent in 2024, the first full year following its rollout, compared to 2023.
Through reducing paperwork, speeding up processing, and clarifying compliance rules, TaRMS is expected to widen the tax base and curb revenue leakages, making it easier for compliant businesses and individuals to meet their obligations.
TaRMS represents a crucial step in modernising Zimbabwe’s tax administration and supporting the Government’s broader economic goals. Through improving efficiency, transparency, and taxpayer experience, the system is expected to accelerate domestic resource mobilisation, helping Zimbabwe meet both its social and economic obligations.
For ordinary citizens, a more effective tax system translates into better-funded public services, improved infrastructure, and a stronger, more resilient economy. As the country rolls out TaRMS nationwide, it marks a significant milestone in the journey toward sustainable, citizen-focused development.
According to economist Gladys Shumbambiri-Mutsopotsi, improving the tax-to-GDP ratio is crucial for citizens.
“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 emphasised that tax collections should naturally rise alongside economic growth, but expanding the taxpayer base is equally essential to achieve the desired ratio.
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