Online Reporter
Business Writer
SMALL to Medium Enterprises (SMEs) have urged the Government to introduce a simplified tax regime to encourage greater compliance within the sector.
Zimbabwe SME Chamber Secretary-General, Mr Venacio Kurauone, made the call during the National Capacity Building Workshop on unlocking opportunities for SMEs under the African Continental Free Trade Area .
Simplified taxation for micro and small enterprises in developing countries is generally designed to promote voluntary tax compliance and eliminate barriers to formalisation and growth.
It is estimated that approximately 70 percent of Zimbabwe’s current economic activity is conducted within the SME sector, the majority of which remains unregistered and operates informally.
According to the Zimbabwe National Statistics Agency (ZimStat), the 2025 Economic Census reveals that 76,1 percent of businesses in Zimbabwe are informal — a figure that has raised concerns over lost tax revenue and unfair competition for formal businesses.
Unregistered SMEs continue to pose a challenge to the local economy, with the Government actively seeking ways to integrate them into the mainstream economy and support their development.
Addressing delegates at the workshop, Mr Kurauone urged Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, to revisit and implement a simplified tax regime to enhance compliance among informal sector operators.
“A simplified tax regime makes it easier for SMEs to meet tax obligations. This encourages more participants in the sector to formalise their operations, boosts tax revenue, and ultimately supports economic growth and development.
“This approach would also help reduce the tax burden on small businesses, enabling them to retain more of their earnings and reinvest in their operations,” said Mr Kurauone.
Simplified tax regimes typically involve a straightforward, lump-sum or fixed tax (commonly referred to as patents) aimed at microenterprises.
These systems consider businesses often run by illiterate or semi-literate entrepreneurs.
Taxes may be structured as presumptive profit taxes or single taxes based on turnover.
The tax liability may be calculated as a percentage of turnover or net profit, using 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, emphasised the need for authorities to invest in SMEs, given their complementary role in supporting larger businesses within the economy.
“SMEs have become a vital component of the local economy and must be supported in every possible way.
Financial institutions should also develop tailored packages that suit SMEs, to foster their growth, capacity, and contribution to the economy,” said Mr Matare.
According to the World Bank, fixed tax regimes that do not require extensive bookkeeping or record-keeping tend to be popular but are also vulnerable to abuse.
Findings indicate that even with a special simplified tax regime in place, small firms may still be discouraged from formalising due to perceived excessive tax burdens, compliance costs, and associated risks — including penalties for actual or alleged non-compliance.
The two-day workshop, which commenced on Monday, aims to build capacity for cross-border trade, deepen understanding of AfCFTA implementation, and identify targeted support for SMEs to access regional markets and value chains.
