ZIMRA to Combat Tax Evasion, Targets Informal Sector with Presumptive Tax Models

HARARE— The Zimbabwe Revenue Authority (ZIMRA) is gearing up for a major push against tax evasion and non-compliance, particularly targeting high levels of under-reporting and the pervasive issue of the informal economy. A strategic document highlights that non-compliance among Small and Medium Enterprises (SMEs) and the largely untaxed informal sector are among the "Major challenges faced."

By Francis S. Bingandadi Editor FinTech Review.Africa

"We acknowledge the persistent challenges of under-reporting and the large, non-compliant informal sector," the Commissioner General explained. "However, our strategy is clear: we are using the full power of TaRMS and continuous process automation to create a national integrated single view of business to close loopholes."

For the hard-to-tax informal sector, ZIMRA is moving away from purely punitive measures toward incentivizing formalization. The plan includes simplifying registration and filing procedures and offering presumptive tax models tailored for small traders. This strategic intervention seeks to bring the informal economy into the tax net, a move vital for broadening the tax base and reducing dependence on a few revenue streams (VAT, PAYE, and Corporate Tax currently account for the majority of contributions).

"We are not just chasing non-compliance; we are building a robust compliance culture," the Commissioner General concluded. "To support this, we are investing in strengthening our enforcement capacity by rolling out data analytics and AI-powered audit tools to address the 'Limited Audit Capacity' challenge, ensuring fairness and equity across the entire economy."