Fee Cuts Bring Relief, But Zimbabwe’s Tax Trap Still Looms

Zimbabwe cuts fees across agriculture, transport, and retail, offering short-term relief (image source)

Zimbabwe’s sweeping reductions in fees across agriculture, transport, and retail have been widely welcomed by businesses and consumers. However, economists caution that without deeper reforms, the country risks remaining trapped in a cycle of over-taxation and limited growth.

“Taxes, licences, permits, and regulations should support economic development rather than hinder progress,” President Emmerson Mnangagwa said during the announcement.

As part of the Ease of Doing Business initiative, the government has slashed fees by up to 50%. Key examples include:

• Dairy processor fees: reduced from $350 to $50

• Borehole abstraction fees: abolished entirely

• Livestock clearance fees: cut to $5 per herd

• Environmental effluent disposal fees: reduced from $800 to $100

Finance Minister Mthuli Ncube said the goal is to ease financial burdens and allow firms to reinvest in operations.

“We’re streamlining costs to help businesses thrive,” Ncube told reporters.

Despite these reductions, experts warn that Zimbabwe remains one of the most heavily taxed economies in Africa, with overlapping levies on income, consumption, and trade. Former Finance Minister Tendai Biti highlighted the challenge:

“High regressive taxes hit innocent working people who are left with little or no disposable income. Cutting fees is good, but the real problem is systemic over-taxation.”

Economists note that Zimbabweans can face up to 15 different levies in some sectors, making compliance complex and discouraging investment. Analysts argue that true prosperity will require currency stabilization, clear investment incentives, and a consistent regulatory environment.

“Fee cuts are a positive first step,” said economic analyst Chipo Zivengwa. “But without macroeconomic stability, businesses will still hesitate to invest long term.”

The government has hinted that reforms may eventually extend to retail, tourism, and manufacturing. Business leaders, however, are calling for structural changes that go beyond temporary fee reductions—seeking a stable fiscal framework that balances revenue needs with sustainable growth.