Tinotenda Hove – Finance Minister Mthuli Ncube has hinted at new taxation measures targeting Zimbabwe’s vast informal sector, as the government seeks to widen its revenue base amid economic challenges.

Presenting the 2025 Mid-Term Budget Review Statement in Parliament on Thursday, Ncube said Treasury was exploring mechanisms to tap into the largely untaxed informal economy, which continues to expand as formal employment opportunities shrink.

“The informal sector remains a critical component of our economy,” said Ncube.

“However, it also presents challenges in terms of revenue collection. Government is therefore considering new measures to bring this sector into the tax net in a fair and sustainable manner.”

While details of the proposed framework were not immediately disclosed, the Finance Minister said consultations were underway and emphasized that any steps taken would be aimed at formalising the sector without stifling livelihoods.

“We want to ensure that small businesses are not burdened but supported to grow while contributing meaningfully to national development,” he said.

The review comes at a time Treasury has so far spent 35% of the approved 2025 National Budget, amounting to US$3.3 billion. Despite ongoing economic pressures, Ncube maintained that the country’s economy remained on track to meet its 6% growth target for the year, although GDP growth for 2024 is now estimated at just 1.7%.

Ncube also noted a 30.2% increase in foreign currency inflows during the first half of the year, which he said was a sign of renewed confidence in the economy. He added that government would stay the course on tight fiscal policy, despite limited fiscal space.

“There is no intention to increase the budget. The remaining 65% is sufficient to take us to the end of the year,” he told Parliament.

The Finance Minister highlighted a number of economic developments, including a shift in the country’s economic structure. “Manufacturing now dominates the economy at 15.3%, overtaking agriculture. However, agriculture is projected to grow by 21.1% in 2025, driven by ongoing investment and policy support.”

In a bid to improve the ease of doing business, the government also plans to review business licences, fees, and regulations across sectors, including agriculture. “Within two weeks, we expect to complete the review of agricultural regulations and fees to remove bottlenecks affecting productivity,” Ncube said.

He also pointed out that public debt, measured in U.S. dollars, now stands at 46.5% of GDP — a ratio he described as “manageable” and consistent with government’s debt sustainability targets.

The proposed taxation of the informal sector is expected to spark debate among small traders and informal business operators, many of whom view existing taxes and fees as already excessive.