The Zimbabwe Revenue Authority (ZIMRA) is facing an escalating tax enforcement crisis, as the dominance of cash transactions, widespread informality, and high-profile corporate tax disputes expose deep structural flaws in the country’s tax collection system.
Commissioner General Regina Chinamasa delivered a frank assessment of the situation this week, outlining the many hurdles the authority faces in mobilising revenue under increasingly difficult conditions. Among the most pressing challenges are the untraceable nature of cash-based transactions, outdated investigative tools, and an inability to keep pace with evolving business structures.
“The cash economy makes it difficult to enforce some of the tax rules,” Chinamasa acknowledged. “The number of disputes we are handling speaks to the non-traceability of transactions and our limited capacity to conduct audits and investigations. We must continuously realign ourselves with developments on the ground.”
Although Chinamasa did not name specific companies, sources confirmed that ZIMRA is locked in protracted disputes with several corporate giants, including Delta Corporation and Innscor Africa. These cases have become emblematic of the enforcement challenges ZIMRA faces, even with large, formal entities.
Delta, Zimbabwe’s largest brewer, is currently involved in a multi-million-dollar battle with the tax authority over alleged under-declarations tied to unrecorded cash sales. Similarly, Innscor Africa — a major player in the country’s food and retail sectors — is also under scrutiny for its handling of tax assessments in its predominantly cash-heavy retail businesses.
“These corporate cases demonstrate what ZIMRA has warned about for years,” said a senior tax consultant. “If even the biggest taxpayers are struggling with compliance in a cash economy, you can only imagine the scale of non-compliance in the informal sector.”
ZIMRA Battles Deepening Tax Enforcement Crisis Amid Cash Economy and Corporate Disputes
More than 70% of Zimbabwe’s economic activity is estimated to take place outside formal banking channels, leaving vast swathes of the economy beyond the reach of tax authorities. This has made it exceptionally difficult for ZIMRA to track income, enforce payment, and ensure fair contribution across sectors.
Despite these headwinds, ZIMRA reported collections of ZWG76.4 billion in the first half of 2025 — narrowly exceeding its target of ZWG75.9 billion. Chinamasa credited this performance to intensified enforcement, expansion of the tax base, and strategic policy interventions. The revenue authority has now set an ambitious target of US$7.155 billion for the full year. However, analysts caution that without aggressive reforms to curb informality and reduce cash dependency, this goal may prove unattainable.
Among ZIMRA’s current efforts to close revenue gaps is a voluntary disclosure drive aimed at recovering taxes on smuggled vehicles. The campaign offers a one-month amnesty for vehicle owners to come forward and regularise their importation status, allowing the state to capture revenue while cleaning up customs records.
“We are taking a carrot-and-stick approach,” Chinamasa explained. “The amnesty is a revenue source, yes, but more importantly, it helps us ensure that vehicles in the country are properly cleared and registered.”
ZIMRA is also increasingly turning to technology in an attempt to modernise tax enforcement. Chinamasa pointed to artificial intelligence (AI) tools as a key development that allows the authority to identify tax dodgers and accelerate enforcement measures.
“The digital trajectory is a game-changer,” she said. “AI is helping us pinpoint areas of non-compliance and fast-track enforcement.”
Yet, not everyone is convinced that technology alone can address Zimbabwe’s deeper tax challenges. Independent economist Dr. Gift Mugano noted that while digital tools are helpful, the structural problems go far beyond technology.
“Digitalisation is positive, but when 70% of your economy is informal and dominated by cash, then you’re trying to build a modern system on a crumbling foundation,” Mugano warned. “You need broad-based formalisation, simplified compliance systems, and trust-building with taxpayers.”
The ongoing tax disputes with major corporations have also sparked concern among other large businesses, with fears that ZIMRA could roll out more aggressive, sector-wide audits. Some experts suggest that while the message is clear — no company is above scrutiny — the real question is whether ZIMRA has the expertise and resources to handle complex corporate cases effectively.
“There’s growing nervousness in the corporate world,” said a Harare-based tax advisor. “The business environment is already difficult. If enforcement is not matched with capacity, we risk seeing more legal battles and less voluntary compliance.”
While ZIMRA’s ability to meet its mid-year revenue target offers a temporary boost, economists say systemic weaknesses — including limited audit capacity, unclear regulations, and a vast untaxed informal sector — continue to threaten Zimbabwe’s fiscal sustainability.
Commissioner General Chinamasa closed her remarks with a call for continued adaptability within the revenue authority. “We must stay aligned with real-time economic developments. Only by doing so can we effectively manage the transactions and responsibilities we’re tasked with.”
Ultimately, for ZIMRA to succeed, experts argue that enforcement must be paired with broader economic reforms that bring more businesses into the formal sector, reduce reliance on cash, and rebuild public trust in the country’s tax system. Until then, Zimbabwe’s tax enforcement crisis is likely to deepen.
Source- Bulawayo24
