Source: Zim govt completes TaRMS rollout: AfDB –Newsday Zimbabwe
THE African Development Bank (AfDB) says the Zimbabwe government has completed the deployment of the new online Tax and Revenue Management System (TaRMS), developed under a US$10,4 million Tax and Accountability Enhancement Project supported by AfDB.
The new system was formally launched on August 18 in Harare by the country’s Finance, Economic Development and Investment Promotion deputy finance minister Kudakwashe David Mnangagwa, the culmination of a process that kicked off in 2023 and has been implemented in phases since then.
TaRMS provides a transparent taxation system that deals with financial leakages and fraudulent activities to ensure that the Zimbabwe Revenue Authority (Zimra) effectively collects taxes.
“The Tax and Revenue Management System was developed under a US$10,4 million Tax and Accountability Enhancement Project supported by the African Development Bank as part of efforts to support the government’s efforts to enhance domestic resource mobilisation,” AfDB said in a statement.
“The bank provided a grant of US$7 million for the design and development of the online system, while the Zimbabwe government funded the procurement of the hardware. The project also included training for internal and external stakeholders and users, as well as change management activities.
“According to the Zimbabwe Revenue Authority (Zimra), revenue collected from new taxpayers increased by 238% in 2024 — the first full year following commencement of rollout of the new system — compared to 2023.”
On the day of the launch, Mnangagwa described the innovation as a bold step in the country’s economic reform agenda, aimed at enhancing revenue mobilisation, improving taxpayer experience, and building a strong foundation for sustainable growth.
“The introduction of TaRMS is expected to support Zimbabwe in closing revenue leakages, widening the tax base and making it easier for compliant taxpayers to meet their obligations through reduced paperwork, faster processes and clearer compliance rules for businesses,” AfDB said.
The TaRMS rollout comes at a time when Zimra is estimated to be collecting fewer taxes than it should, largely due to 76,1% of the economy being informal, which largely goes untaxed.
In yesterday’s NewsDay Business edition, it was revealed that the World Bank discovered that only 6% of Zimbabwe’s informal sector pays taxes.
Yet, this sector represents a gross domestic product (GDP) valuation of US$39,8 billion.
Despite this, Zimra is only expected to collect US$7 billion worth of taxes this fiscal year.
The Reserve Bank of Zimbabwe has previously revealed that the informal sector generates over US$14 billion in annual revenue, more than the formal sector, and has US$2,5 billion of cash in circulation.
Kelvin Banda, officer-in-charge of the Bank Group’s Zimbabwe country office, highlighted the significance of improving the efficiency of revenue collection.
“With dwindling development assistance and donor funding, as well as increased difficulties in accessing external loans, increased domestic resource mobilisation is an essential policy mechanism to assist African countries in addressing their specific development challenges,” he said.
“This launch is a landmark milestone not only for the government of Zimbabwe and the Zimbabwe Revenue Authority, but also for the African Development Bank.”
In recent years, public revenues in Africa have experienced stagnation and setbacks, amidst weak global economic growth and challenging macroeconomic conditions.
“Revenue to GDP levels in Africa lag those of other regions, with average tax-to-GDP revenues remaining below 15% for more than half of the continent’s countries,” AfDB said.
“The African Development Bank estimates that the median African tax-to-GDP ratio should increase from its current level — about 14% — to a minimum of 27,2% to close the estimated annual financing gap of US$402,2 billion required to achieve the Sustainable Development Goals and the African Union’s Agenda 2063.”
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