On October 9, 2025, the Vendors Initiative for Social and Economic Transformation (VISET) and the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ) convened a significant Policy Dialogue on Taxation in the Informal economy at the Crowne Plaza Hotel. This dialogue brought together a diverse group of key stakeholders from government, including the Zimbabwe Revenue Authority (ZIMRA), the Ministry of Public Service, Labor and Social Welfare, Ministry Women Affairs, Community and SMEs Development, Harare City Council, the National Social Security Authority (NSSA), the University of Zimbabwe (UZ), 15 Civil Society Organisations (CSOs), and representatives of the Informal Economy Associations (IEAs).
Objectives of the Policy Dialogue
The primary goal of the policy dialogue was to collaboratively develop solutions that balance revenue generation with the protection and growth of the informal economy, ensuring that the perspectives of those most affected by these policies are integrated into the formulation process. Further, the dialogue sought to enhance stakeholder engagement and participation in the taxation policies related to the informal economy in Zimbabwe, including creating a platform for government representatives, particularly from the Treasury and ZIMRA, to elucidate the intricacies of tax modalities, compliance mechanisms, and enforcement strategies to a diverse group of stakeholders within the informal economy ecosystem. Additionally, the policy dialogue sought to foster opportunities for informal traders to contribute their insights and feedback on the informal economy taxation policy, promoting transparency and accountability in tax collection and disbursement.
Key Presentations and Outcomes:
- Government’s Formalization Strategy:
Presenter: Mrs. Dhliwayo, Director of Employment Services, Ministry of Public Service, Labour and Social Welfare.
Outcome: The strategy has been submitted to Cabinet for ratification and aims to create an enabling environment for inclusive growth, focusing on eight key pillars, including reviewing regulatory frameworks and enhancing stakeholder representation.
- Mandatory Taxation Framework:
Presenter: Ms. Guvi, Zimbabwe Revenue Authority (ZIMRA).
Outcome: An overview of mandatory taxation, including income tax and presumptive tax for specified sectors. Emphasis was placed on the need for registration via the TaRMS system and timely compliance with submission and payment requirements, alongside penalties for non-compliance. ZIMRA’s move towards virtual fiscalization for Micro and Small Enterprises was highlighted, aiding in direct sales data transmission.
- Support for MSMEs:
Presenter: Mr. Mangwende, Ministry of Women Affairs, Micro, Small and Medium Enterprise.
Outcome: Discussion on reforming the taxation framework and business environment, access to finance through loans and grants, and the promotion of digital payment systems. Partnerships with international agencies like International Labour Organisation (ILO) and UNDP for constructing gender-sensitive markets were also underscored.
- Concerns Raised During Plenary:
Participants highlighted a lack of tax knowledge among informal economy actors, leading to ZIMRA’s Head of Audits, Mr. Garuso, sharing his contact information for queries regarding taxation clarification.
- Taxation Policy Brief:
Presenter: Dr. Prosper Chitambara, LEDRIZ.
Outcome: Overview of systemic barriers inhibiting effective taxation, including compliance burdens and exclusion from policymaking. Recommendations included borrowing international best practices like Uruguay’s Mono-tax system and suggested policy changes such as simplifying registration and enhancing transparency. Taxing the informal economy is not just about increasing the fiscal space for the government, but also about promoting equity, transparency, and sustainable development. By embracing inclusive policymaking, simplifying tax structures, and linking revenue collection to visible development outcomes in a quid-pro-quo manner, the government can foster compliance and strengthen trust and confidence. A participatory, accountable, and incentive-driven approach is essential for building a fair taxation system that supports both fiscal capacity and the livelihoods of informal sector operators.
Agreed Action Plan Going Forward:
- Present the Policy Brief: VISET and LEDRIZ will prepare to present the comprehensive policy brief to the Minister of Finance and Economic Development and Parliament for inclusion in the 2026 national budget considerations.
- Enhance Stakeholder Engagement: Establish regular forums for continued dialogue among stakeholders to address concerns related to taxation and the informal economy
- Education and Awareness Campaign: Develop training and informational resources aimed at improving tax knowledge among informal economy actors, this will include working together with the ZIMRA
- Monitoring and Evaluation: Create a framework for assessing the impact of implemented strategies on both revenue generation and the welfare of the informal economy.
- Collaboration with Development Partners: Strengthen existing partnerships and explore new collaborations to support the infrastructure and resource needs of the informal economy.
By focusing on these outcomes and actions, the dialogue aims to foster a more inclusive and sustainable taxation framework that benefits both the government and the informal economy, ultimately contributing to the country’s economic growth. Furthermore, the initiative seeks to establish a monitoring framework that ensures inclusive participation of key stakeholders, including informal actors, in overseeing tax collection and allocation, while integrating informal economy taxation into the Local Accountability and Citizen Engagement (LACE) project’s framework to bolster transparency in resource distribution. The culmination of these efforts will be the finalization of a policy brief addressing taxation and the informal economy in Zimbabwe.
