Zimbabwe’s first economic census has revealed that 76% of the country’s economic activity happens in the informal sector, highlighting a major challenge for tax collection. The informal boom stems from years of economic instability, including currency collapse and hyperinflation. Wholesale and retail trade dominate this informal economy, followed by manufacturing. However, while the informal sector provides vital livelihoods amid declining formal employment, it contributes little to government revenue. Authorities now face the tough task of broadening the tax base without stifling livelihoods. Meanwhile, industry leaders warn that the shrinking pool of formal businesses is overburdened by taxes and regulations, making profitability increasingly difficult.
Bloomberg
