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Halfway through the implementation of the National Development Strategy I (NDS1), the Chamber, its Executive Council, and its broad membership do recognize the efforts by the Government of Zimbabwe in spearheading economic progress towards the attainment of an upper-middle-income society by 2030.

Accordingly, the private sector is taking part in the implementation of the NDS1 objectives and will continue to work with the Government of Zimbabwe to ensure the attainment of the NDS1 targets which include a minimum of 5% growth in economic activities per annum; an open, private sector-led, and competitive economy; creation of 760,000 formal jobs between 2021 and 2025; and maintaining a current account balance of not more than -3% of GDP. We confirm that our previous submissions were given due regard and look forward to the same as we proffer our contributions to the 2024 National Budget as a Chamber. Our submissions are in two parts: current concerns and submissions that were considered but for some reason, were not boarded which we feel are still relevant.

The Hon. Minister of Finance, Economic Development and Investment Promotion, Prof. Mthuli Ncube is expected to present the 2024 National Budget Statement in November 2023. As the leading business membership organization in Zimbabwe, we take this opportunity to present the 2024 National Budget Submissions for your consideration. The 2024 National Budget comes at a time when the Second Republic has started its second term in office after the recently held 2023 General Elections. All stakeholders are required on board to implement Project Zimbabwe. In a nutshell, the points of focus for Zimbabwe going forward are: deepening currency stability; reversing negative perceptions (the state of peace after the election is critical); and focusing on productivity not production in sectors such as agriculture, mining, education, and manufacturing, among others. In this regard, the subthemes for the upcoming 2024 National Budget Statement should be aligned to:

  • Sustainable revival of the economy and employment creation through well-targeted tax incentives and higher spending on, or allocation to productive sectors of the economy;
  • Key provision of fairness which is one of the tax policy founding principles;
  • Increased social spending that meets international protocols and towards achieving Vision 2030 and Sustainable Development Goals, while keeping a close eye on fiscal consolidation; and
  • Promotion of private sector participation in Zimbabwe’s economic recovery agenda through devolution and other means in line with NDS1.


Proposal to the Revision of Tax Thresholds

1.1 Tax-Free Threshold Per Annum

Tax Threshold

ZWL Tax-Free Threshold


USD Tax-Free Threshold


ZWL Equivalence

as of 25 Sept. 2023


from 0 to 2,500,000.00

from 0 to 1,200.00

from 0 to 6,240,000.00

Using an interbank exchange rate of US$1/ZWL5,200 (25 September 2023), the ZWL equivalence of US$1,200.00 would amount to ZWL6,240,000.00 per annum while the ZWL would amount to a paltry US$480.00. Thus, there is a huge disparity in the tax-free threshold in ZWL and USD terms. ZWL earners are being prejudiced and the tax policy thus lacks fairness which is one of its basic principles. With a depreciating currency and high inflation, employees’ earnings are continuously being eroded, and aggregate demand has drastically fallen in the economy.

Our appeal to the Ministry of Finance and Economic Development is to consider revising the tables and have them aligned with the economic environment or fixing the employment tax tables in USD but payable at the prevailing interbank rate. Therefore, given the high inflation environment, the tax-free thresholds should be set in one currency, preferably the US dollar, and payable at an equivalent interbank rate in local currency.

1.2 Bonus Threshold

The bonus threshold should be reviewed upward in line with the current economic environment.

Proposal for a Downward Review of the Value-Added Tax

In the 2023 National Budget, the Government of Zimbabwe through the Ministry of Finance and Economic Development increased value-added tax (VAT) from 14.5% to 15%. The implication of this is that the additional cost of 0.5% was pushed to the consumer and in the process, added burden to the overly taxed population and thus, reduced consumer welfare. Overall, aggregate demand in the economy was also reduced as disposable incomes were negatively affected.

Our Request

VAT should be reduced from the current 15% to 14% in an endeavour to boost aggregate demand in the economy. 

Cigarette Excise and Related Matters

Excise Instrument and rate

The cigarette industry supports evidence-based fiscal policies that ensure sustainability to the Government as well as industry revenues. The Chamber, on behalf of the tobacco industry players, has previously made submissions to your esteemed office requesting that the excise instrument for cigarettes be changed from a mixed instrument (i.e. 25% ad valorem and US$5.00 per 1000 cigarettes) to a specific only excise instrument, which we believed would be advantageous to the Government and the industry alike.

Following our submissions in 2022, a draft model to facilitate the evaluation of the proposal was shared. We continue to look forward to the testing of assumptions and validation of data to be jointly done by the Ministry of Finance, Economic Development and Investment Promotion, and industry players.

Our Request

Prior to the conclusion of the evaluation, we respectfully propose that the current mixed excise regime on cigarettes be maintained. Government revenues, in real terms, have continued to grow under the current regime and we remain available to have further engagements.

Implementation of the Anti-Illicit Trade Policy Measures Announced in the 2022 Mid-Term Budget

The then Ministry of Finance and Economic Development announced in the 2022 mid-term budget statement that the Government of Zimbabwe was introducing much-needed measures to address the prevalent issue of illicit trade in cigarettes. The Chamber welcomed the measures to monitor cigarette production together with the destruction policy for seized illicit products. The introduction of a production counter policy was not only expected to assist in reducing under-declarations but also create a system of accountability and transparency while improving the Government’s revenue, which is currently being lost through misrepresentation of export products.  The current system can be enhanced further by making it mandatory for all cigarette manufacturers to install cameras and close circuit televisions at all production lines, which will provide real-time information on production volumes to the Zimbabwe Revenue Authority (ZIMRA).

In addition to the above measures, we propose that ZIMRA should analyze the operational data of each manufacturer to fully understand and benchmark the costs of production in the industry. Furthermore, the Revenue Authority should monitor the recommended selling prices of each brand for the purposes of calculating the ad valorem excise component. Regarding the Destruction Policy, we fully support and urge the Ministry of Finance, Economic Development, and Investment Promotion to follow through with its promise to draft and issue a Destruction Policy for illicit goods. The conclusion of this policy is essential in enabling ZIMRA to destroy all confiscated illicit cigarettes, thus ensuring illicit goods do not find their way back into the market.

In working towards achieving these very important milestones to curb illicit cigarette trading, we are committed to assisting further by inviting experts on production counters and associated supply chain verification systems, to help marry the current ZIMRA audit process with the new complexity of monitoring and auditing of production counters.

We also propose that the Government of Zimbabwe ratify the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) protocol on the Elimination of Illicit Trade in Tobacco Products (WHO ITP). The WHO ITP’s scope is broad and includes a combination of binding obligations and policy recommendations that cover supply chain controls, international cooperation, and offense definition. If implemented effectively, the protocol could have a positive and sustained impact in reducing the illicit trade in tobacco. We fully support the WHO ITP and believe that the anti-illicit trade measures it contains should apply to all cigarette manufacturers, importers, and exporters without exception.


Value-Added Tax Payments

The Government is the biggest consumer in our economy. Once a business issues an invoice to the Government, settlements are made in about 6 months or even more and businesses are compelled to pay VAT regardless of the payment being received or not. The current setup is that a fiscal tax invoice should be issued within 30 days of supply and on/before the 25th of every month, VAT returns should be submitted. However, in some cases, payment will not have been received by then.

Our Request

VAT payments should be made on the actual cash received by the business and not on an invoice basis. Also, the VAT burden should not be on businesses except to collect the VAT on behalf of the Government. Turnover tax is being used as an avenue in other countries and it can be used also as an option by ZIMRA.

Intermediate Money Transfer Tax (IMTT)

When 2% IMTT was introduced, the spirit of the tax was to bring into taxation the informal sector which was not being taxed. What it has done, however, is to overly tax the formal taxpayers. Businesses are incurring the IMTT even when paying tax dues to ZIMRA, thus it is a tax on tax. To cushion the supply chain players against the increased cost of production, the cost is passed on to the consumer in the form of price increases across all goods. It cannot be emphasized how the intermediate transaction tax has a compounded effect on the supply chain due to the incremental tax charged from the producer to the consumer as shown below.

The Compounded Effect of the IMTT on the Supply Chain

 Source: ZNCC (2022)

Our Request

  1. Allow IMTT to be tax deductible

IMTT is not tax deductible. Its application has to be different between businesses and consumers. The burden of the IMTT tax is huge on business and therefore, the Chamber proposes that the Ministry of Finance and Economic Development should allow the IMTT to be tax deductible and it should be removed when remitting tax to ZIMRA.

  1. Upward review of the tax-exempt transactions

When the IMTT was introduced, the value of the tax-exempt transactions was at most US$10. In the 2022 Mid-term Budget Statement, the Honourable Minister proposed to increase the value of tax-exempt transactions from ZW$1,000 to ZW$2,500.

As the exchange rate continues to depreciate and to cushion the 44% of Zimbabweans languishing in poverty, it is ideal to upward review the value of tax-exempt transactions to at most US$20 and align this to the exchange rate movement to stimulate aggregate demand in the economy by reducing the effect of the IMTT on disposable incomes. This should be replicated for corporates.

Continue Promoting Use of Local Currency

We appreciate the measures that were put in place in May 2023, among them, allowing the settlements for Government’s services to be partly or wholly in local currency. Although the Government, through the Ministry of Finance, Economic Development and Investment Promotion has shown a willingness to implement this, some Government institutions and local authorities still insist on or favour foreign currency payments. We, therefore, appeal to the Government of Zimbabwe, across the board to deepen the use of the Zimbabwean dollar by making it mandatory that payment for any Government’s services should be settled in local currency. The government should be the leader, as the issuer of the domestic currency, in accepting and reporting in local currency. The need for our currency to function and be accepted in both public and private sectors cannot be over-emphasized. All taxes, fees, and levies should be paid for in local currency.


Budget allocations for a broader revival of the economy must be targeted toward capital expenditure in agriculture, manufacturing, health, and tourism sectors, among others. However, the long-term financing mechanisms for long-term projects are more preferred than off-budget financing. The allocations can be appropriated as follows, for major sectors in particular;

  • 15% to the Ministry of Health and Child Care in line with the Abuja Treaty;
  • At least 10% to the Ministry of Land, Agriculture, Water, Fisheries, Climate, and Rural Development in line with the Maputo Declaration on Agriculture and Food Security;
  • Although various expenditure rationalization measures must be adopted, the Government is urged to continue and increase the budgetary allocation for social sector programs given the increased vulnerabilities in society;
    • Drought Mitigation Scheme as part of the country’s climate action;
    • Basic Education Assistance Module (BEAM);
    • Urban Mass Transport System;
    • Business Advisory and Extension Services; and
    • Agriculture Research and Colleges.
  • In line with the International Labour Organization (ILO) Recommendation 202 on Global Social Protection Floors, which set the initial cost of a basic social protection package at between 3.7% and 10.6% of GDP, the expectation is that the Government expenditure in 2024 on social protection must fall within this range.

For our country to achieve fiscal consolidation in the 2024 National Budget, in which great strides have been made in the preceding one, there is a need to reduce wasteful expenditure and financial leakages in the implementation of Government projects and programs.

Treasury is compelled to timely disburse resources to the respective Ministries, Departments, and Agencies, (MDAs) and facilitate constituency development by providing adequate resources to local authorities. As part of reducing wasteful expenditure and financial leakages, local authorities are compelled to enhance due diligence and sound financial management practices in undertaking projects within their jurisdictions. Partnerships with the private sector are strongly encouraged.

Fiscal policy should continue to support vulnerable firms and households: registered SMEs, rural households, and firms in the sectors that were greatly affected by the measures that were put in place to curtail the spread of the pandemic including tourism, and transport sectors. As already mentioned, support for the horticulture sector and the dairy sector is welcome. Adequate budgetary resources must be availed to facilitate the effective implementation of the National Action Plan on Skills Development and the integrated Labour Market Information System.

Cognisant of limited space and the need for continued tightening of both fiscal and monetary policies to bring about much-needed macroeconomic stability, we reiterate that policy support no matter how small is greatly needed.


As the Government of Zimbabwe has allowed for market-led agricultural production and financing, it is prudent that farmers are paid internationally competitive prices for their produce, taking into account suppressed output resulting from the estimations of normal-to-below-normal rainfall during the 2023/24 season. The Ministry of Lands, Agriculture, Fisheries, Water, Climate, and Rural Development should ensure inputs availability and affordability. Direct budgetary support towards the agricultural sector should be limited to curtail excessive expenditure electioneering which induces extra liquidity into the market, and in the process, puts more pressure on the ZWL to depreciate.


Request to Suspend SI 80 of 2023 and Similar Future Policies for the Duration of NDS1

Through SI 80 of 2023, the Government of Zimbabwe fully liberalized the importation of basic commodities indefinitely by totally or wholly suspending Customs duties on the importation of basic commodities regardless of the place of origin. A closer look at the HS2017 governed by SI 53 of 2017 (Customs and Excise (Tariff) Notice 2017), these basic commodities were generally attracting either 10% or 15% in Customs Tariffs prior to the recent policy announcements. The two consecutive years (2022 and 2023) are not only the instances where the Government of Zimbabwe has employed such policy measures under more or less similar economic conditions. At the peak of the hyperinflation in May 2008, the Government of Zimbabwe suspended duties on the importation of more or less similar list of basic commodities. The recent policy announcements which come for a second time in less than twelve months affect different sectors of the Zimbabwean economy differently. There are indeed winners and losers from the liberalization of the importation of basic commodities.

When the government removed import controls in 2022, it was somewhat justified because it was a drought year and local production was low. Given the strong linkages between Zimbabwe’s manufacturing sector with agriculture, which provides 60% of inputs needed by the local manufacturing sector, a fall in agricultural production means low and expensive inputs in the manufacturing sector, which makes production expensive. However, thanks to the programs implemented by the government, agriculture production has grown in the 2022/2023 agricultural season, with self-sufficiency achieved in cereals such as wheat which recorded 375,131 tonnes, and maize which is expected to produce a yield of 2,3 million MT. Removing import controls at a time when Zimbabwe is starting to generate most of its needed raw materials for value addition is therefore counterproductive and will reverse the gains hitherto accrued in agriculture. Given how the playing field is still not even for value chains in Zimbabwe compared to value chains from countries where other finished products are sourced, a blanket removal of import controls is not the sustainable way to solve the market distortions.

Lifting of import controls haphazardly also has the potential to slow down, postpone, or halt some of the planned investments in the manufacturing sector, as investors take a wait-and-see stance for the rest of the year until the import controls are put back. Already the manufacturing sector, which grew by 2.6% last year was projected to slow down to 2.5% this year, and this growth can decline further if the import controls continue for the rest of the year. Also, such Statutory Instruments (SIs) should also have sunset clauses, rather than imposing them indefinitely.

As ZNCC, we believe in moral suasion as one of the means to promote market discipline, while reinforced by effective and concrete policies and measures that support businesses sustainably. We are also of the view that the inflationary pressures that were being experienced in the market then were primarily a result of exchange rate distortions arising from an exchange rate mispricing which made goods and services in formal markets relatively expensive. We are also of the firm belief that activities outside the fiscal space, if not kept in check, can also contribute to inflationary and exchange rate distortions. While the monetary balance might be achieved in the fiscal space, it seems also that some quasi-fiscal activities outside the fiscal space might be contributing to the inflationary pressures.

Proposal to Increase Funding Towards Value Chain Development and Financing

The Government of Zimbabwe is also urged to actively pursue industrial policies and the development of regional value chains and enhance the capacity of the private sector to tape into regional and global value chains as espoused in NDS1.

Also, enhancing the efficiency of the capital markets will facilitate and allow capital to move where it works best. Accordingly, the need for policy coherence especially on fiscal, monetary, and national trade policies cannot be overemphasized.

Information, Communication, Technologies (ICTs)

Government services should be digitalized and the matter should be attended to with urgency. An e-government system will assist in information sharing and enhancing monitoring progress as well as improving transparency and efficiency. The whole of the Government needs to embrace innovation and utilize ICTs to deliver effective services and engage people in decision-making processes so as to establish lasting foundations for sustainable development.

Currently, Zimbabwe has an internet penetration rate of 60% and stability and reliability of the connectivity is a challenge. Efforts should be enhanced towards increasing the internet penetration rate to at least 80% which would also enable the marginalized communities and government offices in rural areas to utilize and facilitate the provision of digital services. We recognize and appreciate the current efforts in digitalizing the passport and other national documents’ application processes. The Ministry of Industry and Commerce has now made it possible to apply for an import license online, removing the need to visit offices for such documents.


Interest Rates

Indeed, the high interest rate has been instrumental in curbing speculative borrowing along with other measures. However, the relatively high cost of borrowing has not been enough to bring down inflation durably since there has been a piecemeal implementation of sound reforms regarding the foreign exchange market that allows for a market-determined exchange rate. In this instance, the monetary authorities have promised those reforms over and over, even in the recent monetary policy statement. The downside risk of maintaining a high ZWL interest rate, as noticed over the past 12 months, is the growing rate of lending in foreign currency and the somewhat declining use of the local currency on the market. From the monetary policy statement, the increase in aggregate banking sector loans and advances was largely attributed to an increase in foreign currency-denominated loans, which constituted about 94% of the banking sector’s loan book.

Diaspora Bond

Given the background of record receipts in diaspora remittances and the lack of external budget support, it will be prudent for the Government of Zimbabwe to introduce a Diaspora Bond in an effort to harness financing for mega infrastructural projects such as roads. According to the Reserve Bank of Zimbabwe 2023 Mid-Term Monetary Policy Statement, diaspora remittances received between January and June 2023 amounted to US$919 million, a 16% increase from US$797 million which was recorded during the same period last year. The total figure for 2022 was US$1.66 billion.

The “unfortunate” part is that the bigger part of these earnings is outside the formal channels and the greater portion of the receipts are going towards household consumption. Therefore, the introduction of a Diaspora Bond is expected to retain the greater part of the remittances into the formal channel and even increase international remittances as the expatriates are expected to invest in such a Bond subject to the degree of risk and return.

Multi-Currency Regime

There is a need for clarity in terms of the multi-currency regime. The Government of Zimbabwe, through the Ministry of Finance, Economic Development and Investment Promotion, announced last year that the multi-currency regime will be in force for the duration of the National Development Strategy I (NDS1). This has created problems for the financial sector. Banks are unwilling to extend credit towards long-term projects or capital expenditure projects, especially in foreign currency given the hazy outlook post 2025 – in the process threatening the forecasted GDP numbers due to credit collapse in the economy. The policy position on currency has weakened the mortgage market. The majority of the financial institutions can no longer afford to enter mortgage arrangements given that most of these average five years are in the Zimbabwean market.


The Government is commended for setting aside at least 5% of the Government’s revenues for devolution. Indeed, there is room to increase the devolution allocation to about 10%.

Our Request is that the additional 5% towards devolution should be ring-fenced for roads upgrade and modernization. The current funding model for roads needs re-strategizing and a new funding model.

Thin Capitalization

Thin capitalization refers to the financing of companies mainly through debt. The thin capitalization rule states that once the debt-to-equity ratio exceeds 3:1, any portion of interest should be added back to taxable income. This is in terms of Section 16 (1) q of the Income Tax Act. The disallowed interest is then deemed to be a dividend subject to withholding tax on dividends. The withholding tax rate is subject to DTA agreements depending on the source of debt. The thin capitalization rules do not apply to local debt from domestic financial institutions that are not related to the debtor. Where Parties to a debt are related under the Transfer Pricing (TP) rules, the arms-length rule has to be met. The interest rate between related Parties is the same as that which would be offered to an unrelated Party.

However, in spite of meeting the arms-length rule, Section 16 (1) q still applies. There is double taxation at the end of the day in that interest is disallowed and charged income tax and the disallowed amount is then treated as a dividend subject to withholding tax.

Our Appeal

Disallow the interest amount and charge income tax on it only. The amount should not be treated as a dividend as this amounts to double taxation.

African Continental Free Trade Area

Proposal for a Trade Fund for AfCFTA

A lot of rhetoric talk has been taking place on the Free Trade Area (FTA) and it is about time that all stakeholders involved move from just talking to making it a reality for Zimbabwe. Thus, the 2024 National Budget should provide adequate budget support for the effective and timely implementation of the AfCFTA.

Through the Guided Trade Initiative (GTI) which seeks to advance commercially meaningful trade under the AfCFTA, our request is that the Ministry of Finance, Economic Development and Investment Promotion in partnership with the Ministry of Foreign Affairs and International Trade identify sectors and products where Zimbabwe is competitive to prioritize and push into the continent. The need for value addition and advancing industrialization need not be overemphasized. 

The National AfCFTA Implementation Committee, under the Ministry of Foreign Affairs and International Trade, needs financial support to spearhead the implementation of the AfCFTA for Zimbabwe’s private sector to effectively participate in the continent.

Osaka Japan 2025 Expo

Zimbabwe is going to be participating in the Osaka Japan 2025 Expo and ZimTrade is currently coordinating the planning for Zimbabwe’s participation. However, no significant work has taken place yet as funds are not available to kickstart the work. Our request is that the Ministry should release the funds as requested by the National Coordinating Committee (NCC) for the Osaka 2025 Expo which amounts to approximately US$3,195,500.00 during the implementation period from 2023 to 2025.

Osaka 2025 Expo Preliminary Budget





Total (US$)