HARARE – The Zimbabwean government has announced a series of measures aimed at addressing the growing informalization of the economy, particularly in the retail and wholesale sectors. In a press statement released by the Ministry of Finance, Economic Development, and Investment Promotion, it was revealed that President Emmerson Mnangagwa chaired a high-level session to assess economic developments and map a way forward.
The session, attended by the two Vice Presidents and key economic ministries, focused on the government’s interventions to stabilize the economy and ensure compliance with formal sector regulations.
According to the statement, Zimbabwe has experienced strong economic growth since 2021, averaging 5.5% annually. However, a slowdown of 2% was recorded in 2024, primarily due to an El Niño-induced drought that affected agricultural production and electricity generation. The government also noted a rising trend of manufacturers bypassing formal wholesalers and retailers to supply informal traders directly, leading to unfair competition and tax evasion. Authorities fear this could undermine economic stability and revenue collection, prompting the introduction of new policies.
The measures introduced include a 5% withholding tax on unregistered Micro and Small Enterprises (MSMEs) making purchases from wholesalers and manufacturers, a reduction in the VAT registration threshold from US$40,000 to US$25,000 to encourage compliance, and stricter regulations on certain imported goods now deemed smuggled unless proof of customs duty payment is provided.
The government also expanded the list of businesses required to register for tax payments and mandated the use of Point-of-Sale (POS) machines for small enterprises to enhance transaction transparency.
