Government is considering linking the renewal of council vendor licences to tax compliance, as part of efforts to accelerate the formalisation of small and medium enterprises (SMEs) and widen Zimbabwe’s tax base.
Responding to a delegate’s question on the need to speed up SME formalisation during the 2026 Mid-Term National Budget Business Breakfast Forum yesterday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube said the time had come to stop viewing SMEs as informal businesses, arguing that many already operate under licences issued by local authorities.
“The proposed measure would see stronger collaboration between the Zimbabwe Revenue Authority (ZIMRA) and local authorities through information-sharing agreements, enabling council vendor licence renewals to be linked to presumptive tax compliance using integrated online systems.
“SMEs should no longer be viewed as informal businesses because they are already licensed and regulated by local authorities,” said Prof Ncube.
He said the current licensing framework presents an opportunity to improve tax administration without creating new regulatory structures.
“What is required is closer collaboration between ZIMRA and local authorities through information-sharing agreements. Vendor licence renewals can then be tied to presumptive tax compliance through integrated online systems,” he said.
Prof Ncube said the proposal would broaden the country’s tax base while ensuring a more equitable taxation system in which all businesses contribute their fair share.
“This approach will broaden the tax base while creating a fairer tax environment for businesses that are already complying with their tax obligations,” he said.
The proposal comes as Government intensifies efforts to formalise the SME sector, which contributes significantly to employment and economic activity but remains largely outside the mainstream tax system.
