Lower Taxes Could Improve Compliance, Banc ABC Microfinance

Banc ABC Microfinance Managing Director, James Wadi, has called for lower tax rates to improve compliance and widen Zimbabwe’s tax base.

Speaking at the Confederation of Zimbabwe Industries (CZI) Business Economic Outlook, he compared tax systems across Africa, noting that countries with lower tax rates, such as Mauritius, tend to experience better compliance.

Wadi suggested that reducing Zimbabwe’s high personal and corporate income tax rates could encourage more people to pay taxes, ultimately boosting government revenue.

He also stressed the need for a stable and transparent tax system, warning that frequent policy changes and a complex tax structure discourage compliance and slow economic growth.

Zimbabwe’s tax-to-GDP ratio has declined to 16%, largely due to the growth of the informal sector. Wadi urged policymakers to consider a shift towards VAT-based taxation as a more effective revenue collection strategy.