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Zimbabwe Government Moves to Tax Offshore Revenues of Domestic Firms

  • Gibbs Dube

The legislation would implement a proposal from Finance Minister Tendai Biti to adopt a residence-based tax regime to broaden the country's tax base.

Zimbabwe's financially strapped unity government is drafting legislation that will let it collect taxes from companies with operations in other countries, implementing a proposal from Finance Minister Tendai Biti to adopt a so-called residence-based tax regime to broaden the country's tax base.

Zimbabwean firms are currently taxed only on income generated within the country.

Economist Tony Hawkins of the University of Zimbabwe said the new tax regime appears to be in line with international tax standards, though some observers say it will be difficult to enforce.

Hawkins told VOA Studio 7 reporter Gibbs Dube that if Zimbabwean-based companies are operating elsewhere, they can be compelled to pay taxes in the country if they are based there.

But economist Rejoice Ngwenya said such a law could open the door for the government to levy taxes unfairly.

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