Zimbabwe tax laws uncompetitive, need reforms – Ernst & Young

via Zim tax laws uncompetitive, need reforms – Ernst & Young | The Source  March 28, 2014

Zimbabwe must reform its tax laws to become a competitive investment destination and encourage productivity in the economy, a global accountancy firm said on Friday.

Zimbabwe’s tax regime is considered as one of the most difficult and expensive, with the country ranked 142 out of 189 countries on the ease of paying taxes in the World Bank’s Doing Business Report last year.

In a critique of the country’s tax regime produced for the Zimbabwe National Chamber of Commerce released on Friday, Ernst & Young Zimbabwe said reformation would reduce the total tax burden for companies and investors.

“Reforms must not focus only on tax rates and incentives but on the other critical factors that impact on the ultimate total tax cost,” it said.

“Resources therefore need to be channelled to the review of the wide range of administrative and tax compliance issues if the local tax system is to be competitive.”

The study compared Zimbabwe’s tax regime with those of the BRICS – Brazil, Russia, India, China and South Africa as well as Angola, Mauritius and Zambia.

Ernst & Young said tax legislation review was not keeping up with the “dynamic business environment.”

“Favourable tax rates are negatively impacted by an inefficient tax administration process,” the accounting firm, said.

Government must consider incentives such as tax holidays equal to 100 percent of profits for companies engaged in infrastructure development, generation and distribution of power as well as for companies that invest in special zones such as Bulawayo, it said.

Tax cuts should also be granted for projects established in support of development efforts under the country’s new economic blueprint, the Zimbabwe Agenda for Socio-Economic Transformation (ZimAsset).


  • comment-avatar
    Old honked 8 years ago

    Get rid of all tax and impose a surcharge on fuel – cheap and easy to collect and widen the net to catch the majority who do not make any contribution to the fiscus

  • comment-avatar
    gizara 8 years ago

    this article is shallow. no facts have been provided on how the tax system is uncompetitive.

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    Reverend 8 years ago

    Basically the zpf dictatorship has murdered the proverbial goose that was laying their golden eggs!

  • comment-avatar

    Its their diplomatic way of telling the Zanu government that they are well past their sell-by date. The economy is in free fall now and the government is doing absolutely nothing to stop this…instead it is actually doing the very opposite by scaring away potential investors to bring in new money…they are practically closing their eyes and hoping for the best…more like see no evil and hear no evil…Pathetic leadership.

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    Chamunoda Nyamakate 8 years ago

    whilst the article itself is shallow but the main point is spot on. Our tax laws need to be reviewed. Our taxation systems has disadvantages:
    a. at the moment is flowing in the informal sector and Gvt has ho mechanism do tax this sector. Instead, it continues to resort to taxing the formal sector (where there is no money at present) to death.

    b. There are no tax incentive for new investors (both local and foreign). How then can we attract investment in country when our neighbours are giving 5-year tax holidays?