As Zimbabwe grapples with the challenge of revenue generation, taxes have emerged as a cornerstone of the country’s economic framework, contributing an estimated 90% of government revenue.
However, with the informal sector dominating the economy, authorities are exploring creative ways to tap into untaxed financial flows.
In the 2024 budget statement, Finance and Economic Development Minister Professor Mthuli Ncube announced a proposed 10% tax on gross sports betting winnings, set to take effect on January 1, 2025.
The move, he explained, is driven by the surge in online and in-person sports betting, as well as the rapid proliferation of betting shops across the country.
Economist and consultant Dr. Michael Pasara said taxes were important in sustaining Zimbabwe’s economy.
“We need to understand as citizens why the government needs taxes. Taxes are the major source of income revenue. That is how they fund most of the things we need as a country,” he said, adding that taxes currently make up at least 90% of government revenue.
Dr. Pasara pointed out that with the informal sector accounting for 70% to 80% of economic activity, policymakers must devise innovative approaches to expand the tax base. Sports betting, he noted, has become a lucrative industry with significant untapped revenue.
“The government sees an opportunity in the growing sports betting industry, where a lot of money is circulating. It’s a logical step to ensure they also benefit from this sector,” he explained.
The proposed tax has drawn mixed reactions from sports bettors in Bulawayo. One punter, who preferred to remain anonymous, likened the move to practices in other countries.
“What the minister did is no different from what other countries do. In some places, betting winnings are heavily taxed. For example, if someone wins a million, they might only take home $600,000 after taxes and deductions,” the punter said.
However, others expressed concerns about the implications of the tax. Wellington Sibanda, a regular bettor, argued that the new policy would reduce the already uncertain returns from betting.
“Betting is all about luck and consistency. You can bet multiple times before winning. If winnings are taxed, it means we are putting in the same amount of money but taking home less,” he said.
Sibanda also warned that the tax could drive betters towards illegal platforms, where winnings are not subject to deductions.
