Zimbabwe still has one of the lowest Value Added Tax rates in the region despite the hike from 14.5% to 15% from next month.
Responding to concerns raised by legislators during the debate of the 2023 budget, Finance Minister Mthuli Ncube gave a breakdown of rates in the region which stand as follows:
- Madagascar 20%
- Tanzania 18%
- Malawi 17%
- Mozambique 17%
- DRC 16%
- Lesotho 16%
- Zambia 16%
- Eswatini 15%
- Mauritius 15%
- Namibia 15%
- Seychelles 15%
- South Africa 15%
- Zimbabwe 15%
- Angola 14%
- Botswana 14%
“It is clear that we are not at the upper end of our peers, we are in the middle and in fact we are below average,” Ncube said.
“The average is actually 16%, Tanzania is 18%, so when you look at Madagascar at 20%, that is quite higher and those are our peers. So I feel that Hon. Members are really fighting to make sure we do not over tax people and so forth.
“I believe that 15% is a fair level. I did drop it by half percent on account of COVID-19 to deal with the shock that citizens were experiencing. I think it is fair to say that now we have gone back to normal, we are not going to shut down the economy anymore and cause a lot of pain that way, people losing jobs and so forth; that is not going to happen going forward.
“We have learnt to live with COVID-19, people should just get vaccinated. Besides we agreed that half percent should be ring-fenced for dealing with education issues so that we can probably be true to this issue of free education as we go forward. So this half percent is for the education sector as agreed,” he said.
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