THE Zimbabwe Cross Border Traders Association (ZCBTA) secretary-general Augustine Tawanda says authorities are dismissing a proposal for a time-based licensing system to encourage formalisation from cross-border traders.
ZCBTA, a registered association representing cross-border traders, argues that current policies to encourage formalisation fail to accommodate the realities of informal traders, who make up the bulk of Zimbabwe’s workforce.
The organisation has since made several suggestions on how the authorities should implement policies that could encourage compliance rather than tax evasion.
Part of the reasons why informal traders evade taxes is the high number of these obligations.
During the recently held National Competitiveness Commission inaugural 2025 Competitiveness Summit held in Bulawayo, it was revealed that Zimbabwe has a total of 51 taxes, the highest in the region.
“For over a decade, we have been proposing a simple and affordable licensing system that would allow cross-border traders to register without going through a complicated and costly process,” Tawanda told Standardbusiness in an interview
“Unfortunately, Zimra (Zimbabwe Revenue Authority) and the Ministry of Finance refuse to accommodate these proposals because they prefer a Eurocentric model that does not suit the nature of informal trade in Zimbabwe.”
He argued that a quarterly trader’s licence fee of US$25 could encourage up to 400 000 traders to voluntarily register, generating at least US$10 million per quarter.
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“If properly implemented, this system could bring more traders into the tax net and boost government revenue.
“But as it stands, the government collects very little because most traders prefer to stay informal,” Tawanda added.
According to ZCBTA, one of the biggest obstacles to reform is Zimra’s dual role as both policy advisor and enforcer, which limits meaningful stakeholder participation.
“Zimra claims to be just an implementer of policies, but at the same time, it is the key advisor to the Ministry of Finance,” Tawanda said.
“Whatever they whisper into the minister’s (Finance minister Mthuli Ncube) ear becomes law, leaving little room for traders to contribute to policies that affect their businesses.”
He added that the Ministry of Finance viewed formalisation purely as a tax issue, disregarding other critical factors such as livelihoods, employment creation, social security, and the growth of microenterprises.
“This is a narrow approach to formalisation. The government must recognise that cross-border traders contribute significantly to the economy beyond just paying tax,” Tawanda said.
The association also criticised the rigid and costly compliance requirements imposed by the Companies and Other Business Entities Act, which it says were designed for large corporations, not small traders.
“The current system requires an individual trader to register a company, submit tax returns, and hire an accountant—things that are simply not practical for most cross-border traders,” Tawanda said.
He suggested that the government adopt a more flexible, IT-based registration system that considered the profitability of different trading clusters, allowing traders to register without unnecessary paperwork.
“It should be as simple as buying a licence online or at the border, with clear benefits attached to compliance,” Tawanda continued.
ZCBTA believes that offering tangible benefits to registered traders would increase compliance.
“If traders see real benefits in registering, they will comply voluntarily.
“For example, part of the revenue collected from licensing fees could be reinvested into projects that support traders, such as trade fairs, expos, and the development of border markets,” Tawanda said.
The reason why Zimra and treasury have become aggressive in seeking tax compliance from the informal sector is due to the central bank estimating it of generating annual revenue of US$14,2 billion.
The bank also estimates US$2,5 billion in cash is circulating in the industry.
