The Government of Zimbabwe is mounting pressure on informal retailers popularly known as tuckshops to formalize their operations so as to enhance Government tax revenues, economic stabilization and growth. Formal businesses are enduring unfair competition from informal businesses and as a result their survival is at stake and some are shutting down operations.
The move is also designed to include informal businesses into a system that includes dual currencies, bank accounts and electronic payments. In view of this, Government enacted new regulations that is Statutory Instrument 7 of 2025 [ Customs & Excise (Designated Deemed Smuggled Goods), Regulations 2025. Under the new regulations commonly smuggled goods will be presumed smuggled unless merchants provide valid customs clearance (duty).
The Government will also implement a presumptive retail level VAT that manufacturers must collect from small or informal businesses lacking tax clearance certificates to restrict wholesalers from engaging unlicensed entities and further pushing informal businesses to formalize. The requirements to be met by businesses seeking formalization includes mandatory bank accounts, acceptance of a dual point of sale system (POS) allowing customers to choose preferred currency during transactions and registration with the Zimbabwe Revenue Authority (ZIMRA). The conditions are designed to facilitate compliance with tax regulations. Minor transactions will not incur taxes and bank charges. For transactions below US$5.00 there will be no POS charges and transactions below US$100.00 will face no banking fees.
The pressure to formalize businesses is piling up in the Zimbabwe business landscape so that businesses will comply with tax requirements.