HARARE - Zimbabwe has the highest taxes in Sub-Saharan Africa, the Labour and Economic Research Institution of Zimbabwe (Leritz) says.
The economic think tank said this has left the financially distressed country “limited room to manoeuvre in raising revenues through additional taxes”.
“With taxes accounting for 93,9 percent of total revenues during the period January to June 2014, and 28,4 percent in 2013, Zimbabweans are already over-taxed relative to their compatriots in Sub-Saharan Africa,” Ledritz’ economist and senior researcher Naome Chakanya said at a Zimbabwe Coalition on Debt and Development (Zimcodd) meeting in the capital on Tuesday.
“At 27,5 percent of GDP, the revenue-to-GDP ratio is already high, compared to levels below 20 percent for Sub-Saharan Africa,” she said.
She added that the raft of tax measures introduced by Finance minister Patrick Chinamasa in his mid-term fiscal policy statement recently was short-sighted.
“The avenue taken in the mid-term fiscal review statement — in particular the excise duties on fuel and telecommunications airtime (voice and data), customs duty on handsets — is retrogressive and anti-poor as it increases the tax burden on the already overtaxed Zimbabweans.”
“The focus on raising taxes without enhancing productive capacity and productivity amounts to nothing short of milking the cow without feeding it,” she said.
According to the International Monetary Fund (IMF) stipulations, Zimbabwe’s tax-GDP ratio is already too high.
“…a country’s taxes must match its per capita. Currently the Zimbabwe tax to GDP ratio stands at about 49,3 percent and this is already too
high,” said Cade Zvavanjanja, a local analyst with Greeyps Risk,
Efficiency and Development Consultants.