The Zimbabwean government will undertake a significant reduction of taxes and regulatory fees, aiming to improve the business climate. A high-level committee will review regulations over six months to alleviate burdens on businesses. President Mnangagwa emphasizes the necessity of simplifying processes to promote economic growth, especially in the retail sector that suffers from excessive licensing requirements.
The Zimbabwean government has announced a significant overhaul of taxes and regulatory fees intended to simplify business operations. Some fees will see a reduction of up to 50% or be eliminated entirely, aiming to reduce bureaucratic barriers that hinder economic growth. A high-level committee has been established to review existing regulations and feedback from industry leaders regarding the financial burdens they face.
This review process is expected to take approximately six months, with a focus on streamlining licensing and regulatory processes across all sectors, thereby reducing financial pressures on businesses. President Mnangagwa emphasized during a recent Cabinet meeting that regulations and fees should promote, rather than impede, economic development. Currently, the business environment is plagued by high tariffs and a complex regulatory framework that contributes to elevated operational costs.
Professor Mthuli Ncube, Minister for Finance, Economic Development, and Investment Promotion, indicated plans to potentially halve the number of taxes within the next six months. The committee will assess which taxes and regulatory fees can be minimized or removed to foster a more conducive environment for business operations. He stated, “The cost of doing business in Zimbabwe is relatively high, and we are working to improve the business environment.”
The retail sector, in particular, has been severely impacted by the cumbersome tax system. According to a report by the Confederation of Zimbabwe Retailers (CZR), the excessive number of licenses required creates a significant barrier for small and medium enterprises (SMEs). Many supermarkets in Zimbabwe need to obtain over 30 different licenses, driving up compliance costs and deterring investment.
In Harare, a supermarket may face costs from numerous municipal fees, such as a bakery license for US$703, and various regulatory permits, each contributing to substantial annual expenses. Compliance with both municipal and national requirements significantly amplifies this burden, making it challenging for formal retailers to compete against informal traders who do not shoulder the same costs.
CZR President Denford Mutashu highlighted that, beyond licensing fees, additional factors like high rentals and utility rates further impede the business landscape. President Mnangagwa reiterated the government’s commitment to improving the ease of doing business, noting, “Concerted efforts must be made to revisit all the areas that hinder the start or growth of investments.”
Comparative analyses reveal that countries in the region, such as South Africa and Rwanda, maintain far fewer regulatory demands on businesses, raising concerns about competitiveness for Zimbabwean firms. By simplifying regulations and reducing fees, the government hopes to foster a more appealing business climate that encourages local and foreign investments.
In summary, the Zimbabwean government is set to implement substantial reforms in its tax and regulatory framework to alleviate the burdens faced by businesses. The planned reduction of fees and licenses aims to enhance competitiveness and stimulate economic growth. As authorities work to streamline the business environment, the focus remains on ensuring that regulations facilitate rather than obstruct investment and development, particularly for small and medium enterprises.
Original Source: www.zawya.com
