Zimbabwe launches drive to formalize informal economy

The Government of Zimbabwe has launched a comprehensive initiative to formalize the nation’s informal economy and restore order to Harare’s central business district. The strategy includes a 60-day drive focused on strengthening formal business operations and enhancing tax compliance across retail and wholesale sectors.

Key economic measures include a 5% withholding tax on non-registered Micro and Small Enterprises (MSMEs) when purchasing from wholesalers and manufacturers. Additionally, the Value Added Tax (VAT) registration threshold has been lowered from US$40,000 to US$25,000 to encourage formal registration. The government also plans to crack down on smuggling by requiring strict customs documentation for various goods.

To address urban congestion in the capital, the government has approved a four-pillar plan—Legislate, Provide, Formalize, and Enforce—to manage illegal vending. This includes servicing 100 identified vending sites with essential infrastructure such as water, lighting, and waste management, as well as developing a new modern satellite market on the periphery of the Harare CBD to decongest the city center.