The City of Harare has announced a major reduction in business licence fees, a move expected to lower the cost of doing business and encourage more entrepreneurs to formalise their operations.
Presenting the 2026 Budget yesterday, Finance Committee Chairperson, Councillor Costa Mande, said the adjustment follows a government directive for municipalities to rationalise and reduce licensing fees.
“In line with the Government of Zimbabwe’s directive for municipalities to rationalise and reduce business licence fees, the City of Harare has recalibrated its 2026 tariff framework to support investment growth, enterprise formalisation, and economic recovery,” said Cllr Mande.
Under the proposed framework, shop licence fees have been reduced by about 50 percent.
Shops under 50m², which currently pay US$400, will now pay a flat annual licence fee of US$200.
Hawkers (non-food) will pay US$58, down from US$115, while hairdressers operating in Class A shops will now pay US$230 — also a 50 percent reduction.
“This proposed tariff structure seeks to make Harare a competitive, inclusive, and business-friendly city, while maintaining adequate fiscal capacity to sustain service delivery,” said Cllr Mande.
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He added that the city adopted a tiered reduction model to balance compliance with the national directive and the city’s own financial sustainability.
“This model recognises Harare’s strategic role as the national capital and commercial hub, where affordable licensing is essential to attract investment, create jobs, and formalise the small to medium enterprises sector,” he said.
According to the City’s 2026 budget, total expenditure is pegged at US$690.8 million, up 19 percent from the 2025 allocation. Of this, US$455.3 million (66 percent) is set aside for revenue expenditure, while US$234.8 million (34 percent) will go toward capital projects.
The main income sources remain property tax (US$211.77 million), water services (US$123.51 million), and wastewater services (US$40.27 million). However, the council anticipates an initial revenue shortfall of about US$500,000 due to the reduced licence fees.
The budget also allocates five percent of total expenditure to social inclusion initiatives, including upgrading maternity clinics, opening three drug rehabilitation centres, and improving market spaces to provide safer trading areas for women.
“This is about more than numbers; it’s about people,” said Cllr Mande. “By making it easier for small businesses, women, and youth to operate legally, we’re investing in a stronger, fairer Harare.”
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