The Zimbabwe Revenue Authority (ZIMRA) recently released the Pay As You Earn (PAYE) tax tables for the year 2025, outlining the income tax brackets and deductions for individuals earning foreign currency as well as ZiG. This announcement comes at a time when ZIMRA has intensified its efforts to broaden the tax base and collect more revenue, reflecting the government’s push to boost the national treasury. A comparison with the previous year’s tables shows some minor tweaks, but the underlying principle of progressive taxation remains, with higher earners contributing a greater percentage of their income. These changes underscore the constant shifts in Zimbabwe’s economic landscape and the attempts to fairly balance the tax burden amongst earners.

Understanding the 2025 PAYE Tax Structure

The 2025 tax tables detail the rates at which income will be taxed, and they are crucial for both employers and employees in understanding their obligations and expected deductions. It is essential to consult these tables as they apply across different payment frequencies including, daily, weekly, fortnightly, monthly, and annually. A common feature of these tables is a progressive structure, which means that as income increases so does the tax rate applied. This ensures that those with higher earnings contribute a larger proportion of their income in taxes.

Daily Tax Table: For those earning daily wages, the tax rates range from 0% for the lowest earners up to 40% for the highest earners, with various deductions applicable at each bracket. For instance, someone earning $9 per day would have a tax of around $1.14 after deductions.

Weekly Tax Table: The weekly tax tables follow a similar pattern, with the highest tax rate at 40% on incomes above $692.32 per week with deductions applied at each tier. An individual earning $65 per week would have a tax burden of about $8.38.

Fortnightly Tax Table: The same taxation principle is applied to those earning every two weeks, with rates going up to 40% for the highest-earning bracket. For example, an individual with a fortnight pay of $420 would pay around $88.85 in tax, after deductions.

Monthly Tax Table: The monthly rates increase to the same top rate of 40% for higher earners. For example an employee earning $1 800 per month would have a tax burden of $455.

Annual Tax Table: Finally, the annual tax tables show a tax burden that is also progressive, moving up to 40% for the higher income bands. An employee earning $32,000 per year would be subject to a tax bill of around $8,980

It’s also important to note that an Aids Levy of 3% of the individual’s tax payable is added to the calculated income tax. These figures highlight the complexity of the tax system and the need to carefully calculate one’s tax burden based on different income levels and frequencies.

ZIMRA’s Increased Tax Collection Efforts

The release of these tax tables coincides with the Zimbabwean government’s continued focus on improving revenue collection. In the past year, ZIMRA has been actively pursuing various strategies to expand the tax base and increase tax compliance. This has included measures to target individuals and businesses that may be operating in the informal sector and not currently contributing their fair share.

Recent activity from ZIMRA indicates a more aggressive approach to tax collection. They have launched crackdowns on smuggling, targeting everything from basic foodstuffs to more high-end consumer goods. This has resulted in roadblocks and checkpoints that have led to the seizure of smuggled goods and the imposition of hefty fines on transporters. These operations, sometimes conducted with the support of law enforcement agencies, have significantly impacted individuals and businesses.

ZIMRA has also been focusing more on professionals and businesses, ensuring they are registered and compliant with the tax laws. This has also been accompanied by audits to identify tax evasion. The tax authority has also been given more power to target and confiscate goods suspected to be smuggled even from small businesses. These initiatives highlight ZIMRA’s commitment to enforcing tax regulations and addressing tax evasion.

The Broader Implications

These tax changes and ZIMRA’s aggressive collection methods come at a time when the average Zimbabwean is already struggling with the high cost of living and low disposable income. The tax burden has disproportionately been placed on those who are in formal employment, while the informal sector, which is estimated to constitute over 60% of the economy, has proven difficult to effectively tax. This uneven distribution of taxes has led to resentment and a feeling that the same segment of the population is repeatedly being targeted, while the informal sector is simply shifting to cash-based transactions to avoid such taxes.

It is understandable that the government needs revenue to meet its responsibilities but a lot of people are complaining about the tax collection methods and their impact on the already strained household budgets. Many feel that the tax administration could be improved. A lack of public trust in government can be a barrier to compliance, so enhancing trust and accountability are also part of a fair tax environment.

As already said ZIMRA has been pretty aggressive these past couple of months when it comes to compliance and tax collection. If you are are business you would do well to heed these tables and other new current tax measures. Otherwise you might find yourself paying a steep penalty.