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Business Reporter
SMALL to Medium Enterprises (SMEs) have implored the Government to implement a simplified tax regime to promote compliance in the sector.
Zimbabwe SME Chamber secretary general Mr Venacio Kurauone said this at the National Capacity Building Workshop on unlocking opportunities for SMEs in the African Continental Free Trade Area (AfCFTA) earlier this week.
A simplified taxation for micro and small enterprises in developing countries, generally, is designed to facilitate voluntary tax compliance and remove obstacles in moving towards business formalisation and growth.
It is estimated that about 70 percent of Zimbabwe’s current economic activity is carried out in the SME sector, the majority of whom are not registered and operate informally.
According to the Zimbabwe National Statistics Agency (ZimStat’s) 2025 Economic Census, 76,1 percent of businesses in Zimbabwe are informal, a statistic that has raised concerns about tax revenue loss and competition for formal businesses. Unregistered SMEs remain one of the local economy’s conundrums as the Government keeps searching for ways to incorporate them into the mainstream economy and also promote their growth.
Addressing delegates at the workshop, Mr Kurauone said Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube should revisit and implement a simplified tax regime to boost tax compliance among informal sector operators.
“A simplified tax regime makes it easier for SMEs to comply with tax requirements. That encourages more players in the sector to formalise their operations, increase tax revenue and ultimately promote economic growth and development.
“This approach would also help to reduce the tax burden on small businesses, allowing them to retain more of their earnings and invest in their operations,” said Mr Kurauone.
The simplified tax regime normally entails a simple, lump-sum or fixed amount of tax (also known as patents) targeted at microenterprises. It takes into account businesses that are often operated by illiterate or semi-literate entrepreneurs. The taxes may be configured as presumptive profit taxes or single taxes, which are based on turnover. The tax liability may be calculated as a percentage of turnover or net profit, and computed by applying a standardised cost deduction from turnover to account for business expenses.
Speaking at the event, Zimbabwe National Chamber of Commerce (ZNCC) representative Mr Kuda Matare said authorities should invest in SMEs, given the complementary role they play in supporting big businesses in the economy.
“SMEs have grown to be a critical part of the local economy; they need to be supported in every way possible.
“Financial institutions should also craft supportive packages that suit SMEs to encourage their growth, capacity and contribution to the economy, “ said Mr Matare.
According to the World Bank, fixed tax regimes that do not require significant bookwork or records tend to be overly popular but prone to abuse.
Findings show that despite the operation of a special simplified tax regime, in some cases small firms may still be deterred from formalising due to perceived excessive tax burdens, compliance costs and risks (including risks of punishment for real or alleged non-compliance).
The two-day workshop, which started on Monday, aims to strengthen capacities for border trade, understand AfCFTA implementation, and identify targeted support for SMEs to access regional markets and value chains.
