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Saturday, February 4, 2023
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Would Zimbabwe thrive as the ‘tax haven’ of Africa?

Ask me if I would want to collect large taxes from a few, or collect few taxes from many – I would probably say, “collect few taxes from the many”. I would do that. Would you do the same? Doing this has so many pros and positives for a small population country like Zimbabwe – standing in at 14.95 million people (Source: World Bank, 2013). Imagine the largest foreign companies from the Americas, Europe, Asia, and Oceania all setting up their corporate headquarters in Zimbabwe, all because of low taxes. Imagine these huge multinationals paying ‘low’ taxes to the Zimbabwean government. These low tax rates would not produce low tax revenues would they? These will be significantly higher tax revenues.

The tax rates would be low, but the sheer magnitude of the size of these companies would cause the GNP of Zimbabwe to soar to the skies. This is a country with the highest literacy rate in Africa, perfect to manage a tax haven economy. Imagine the working population above the age of 21, coming fresh out of university and college being part of the management of these foreign companies. The unemployment rate would jump from 90% to 0% – how about this for a win-win?

Implementing a tax haven economy would significantly reduce the prevalence of the informal sector as well. It may seem as if the taxes rates are low, yes they will be, but for a country the size of Zimbabwe, this would be the most strategic of legislation because the sizes of these companies will result in a significant increase in the country’s tax revenue.

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This is a country with remarkable tourist attractions like the mighty Victoria Falls – one of the ‘seven wonders’ of the world. Captains of industries around the world with their headquarters in Zimbabwe will fly in from time to time and visit the many adventurous tourist attractions within the country while on business. The country will now be in a position to build massive infrastructure like roads and airports, and the skylines of Harare, Bulawayo, and Mutare – the three biggest cities – will be abundant with many newly built office buildings and sky-scrapers where the new formal sector will work – perhaps other new cities will sprout and the civil society of Zimbabwe will modernize and be recognized as a first-world economy.

This does not mean that being a tax haven has nothing wrong with it. Some countries have been blacklisted for being the worst offending tax havens – but would it be wrong for Zimbabwe in the eyes of the world or would it be beneficial to everybody and prove to be a good economic turnaround?

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263Chat is a Zimbabwean media organisation focused on encouraging & participating in progressive national dialogue

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