Zimbabwe still has one of the lowest VAT despite the hike

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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