Many Zimbabwean small business owners and start-up founders often believe they are too small to be noticed by the Zimbabwe Revenue Authority (ZIMRA). Tax compliance can seem complex and intimidating, so the default reaction is to ignore it—until it becomes a costly mistake. This article looks at what you need to know about taxes in Zimbabwe.
However, in 2025, with ZIMRA expanding its digital tax systems and intensifying compliance monitoring, it’s critical that small businesses understand their tax obligations and get the basics right from the start.
Whether you’re selling goods from a kiosk or building a tech start-up, taxes matter. From registration to remittance, this guide outlines everything you need to know to stay compliant and competitive in Zimbabwe.
Why Tax Compliance Matters
As your business grows, you’ll need to show proof that you’re operating above board. Without a valid ITF263 Tax Clearance Certificate, you will struggle to:
- Transact with formal sector businesses, especially corporates and government departments.
- Hire top talent who expect compliant payslips and benefits.
- Access finance from banks, microfinance institutions, or investors.
- Avoid penalties, interest charges, and audits from ZIMRA.
It’s cheaper and easier to start right than to fix costly tax mistakes later.
Key Types of Taxes You Must Understand
Here are the major tax categories that every Zimbabwean small business must know in 2025:
1. Income Tax
Income Tax in Zimbabwe is governed by the Income Tax Act [Chapter 23:06] and the Finance Act [Chapter 23:04]. It applies to both individuals and businesses on profits and earnings.
Types of Income Tax for Small Businesses:
- Corporate Income Tax
- Investment Income Tax
- Pay As You Earn (PAYE) for employees
Corporate Tax (For Registered Companies and Sole Traders)
What it is:
Tax charged on the net profit of the business during the financial year.
2025 Tax Rate:
- 24% Corporate Tax
- 3% AIDS Levy
- Effective Rate: 24.72%
Quarterly Payment Dates (QPDs)
Income Tax is paid provisionally each year as follows:
| Quarter | Due Date | % of Annual Tax | |
| 1st | 25 March | 10% | |
| 2nd | 25 June | 25% | |
| 3rd | 25 September | 30% | |
| 4th | 20 December | 35% | |
- File ITF12C annual return by 30 April.
- Use ITF12B forms for quarterly submissions.
2. Pay As You Earn (PAYE)
What it is:
A withholding tax on employee salaries, collected by employers and submitted to ZIMRA monthly.
Employer Obligations:
- Register for PAYE within 14 days of hiring your first employee.
- Deduct and remit PAYE by the 10th of each month.
- Submit the P2 monthly return and
- File the ITF16 annual reconciliation by 30 January of the following year.
Failure to remit PAYE on time results in interest and penalties—even if you’re late by a day.
3. Value Added Tax (VAT)
What it is:
A consumption tax levied on taxable goods and services.
VAT Registration Threshold in 2025:
- US$40,000 turnover in any 12-month rolling period.
- If your annual revenue exceeds this, VAT registration is mandatory.
VAT Compliance Checklist:
- Register for VAT with ZIMRA (form VAT1)
- Submit monthly VAT returns (VAT 7) through the ZIMRA e-Services portal.
- Issue ZIMRA-compliant tax invoices for all taxable sales.
- Maintain accounting records for 6 years.
Ensure your business complies with fiscalisation regulations (use of fiscal devices for capturing sales data)
4. Withholding Taxes
These are taxes withheld at source and paid directly to ZIMRA on behalf of the recipient.
Common Examples for Small Businesses:
- 10% Withholding Tax on services provided to government or formal sector clients (if you lack a Tax Clearance).
- 15% Non-Resident Tax on payments made to foreign service providers.
Note: You can avoid the 10% withholding tax deduction if you possess a valid ITF263 Tax Clearance Certificate.
Registration Essentials for New Businesses
When registering your business with ZIMRA in 2025, here’s what you’ll need:
| Requirement | Description |
| CR14 or Business Name | From the Companies Registry |
| Bank Account | Must be opened in the business name |
| Lease Agreement/Proof of Address | For your operating premises |
| Director/Owner’s ID & Contact | National ID, email, and phone number |
| TIN (Taxpayer Identification Number) | Issued during registration |
Tips to Stay Compliant and Avoid Penalties
- Always file tax returns on time, even if no tax is due.
- Keep clean accounting records—hire a certified bookkeeper or accountant if necessary.
- Renew your ITF263 Tax Clearance annually.
- Understand ZIMRA’s e-services portal and file digitally.
- Stay updated with Finance Acts, as tax rules are revised yearly.
Conclusion: Don’t Fear Taxes—Master Them
Understanding Zimbabwe’s tax system is one of the most important steps a small business can take to grow sustainably. Rather than fearing tax compliance, embrace it as part of professionalising your operations.
