Tax audits and investigations conducted by the Zimbabwe Revenue Authority (ZIMRA) recovered more than US$540,7 million and ZiG4,63 billion in unpaid taxes during 2025, highlighting both the scale of tax leakages in the economy and the growing effectiveness of compliance enforcement measures.

The recoveries were revealed by ZIMRA director of finance and administration Ethel Chitanda while presenting the authority's annual report at its Ninth Annual General Meeting in Harare on Friday.

The figures show that billions of dollars that could have been lost through tax evasion, under-declaration of income and non-compliance were brought back into the national fiscus through targeted audits and investigations.

Sector-based investigations accounted for the largest share of the recoveries, generating US$386,85 million and ZiG2,77 billion, while routine audits recovered US$153,89 million and ZiG1,86 billion.

During the year, ZIMRA completed 7 162 audit cases and 398 sector-based investigation cases, making 2025 one of its most active enforcement years in recent memory.

Chitanda attributed the success to the authority's increased use of technology and intelligence-driven compliance systems.

"The use of data analytics, sector-based business intelligence and systems review resulted in data-driven intelligence being used for smart audits and investigations," Chitanda said.

She said the authority's compliance strategies had significantly improved its ability to detect hidden economic activity and revenue leakages.

"The implementation of the strategies Detect, Disrupt, Deter has helped ZIMRA plug revenue leakages in the hidden economy," Chitanda said.

The recoveries come at a time when Government is intensifying efforts to strengthen domestic resource mobilisation and reduce dependence on external financing.

The annual report also revealed that outstanding tax debt increased significantly during the year, rising by 35,53 percent from ZiG22,98 billion in 2024 to ZiG31,15 billion in 2025.

According to ZIMRA, the increase reflects the authority's success in identifying previously undeclared income and assessing non-compliant taxpayers.

"The increase in debt is on account of intensive audits, investigations and routine compliance checks, which resulted in assessments being raised from non-compliant taxpayers," Chitanda said.

"This shows that Auditors and Investigators are doing their work of unearthing undeclared income," she said.

ZIMRA also pursued criminal prosecutions against tax offenders.

"Prosecutions are a deterrent tool used to plug revenue leakages. The prosecutions signal a message to discourage tax offenders from non-compliance," Chitanda said.

She said 299 offenders were successfully prosecuted following investigations and audits.

"A total of two hundred and ninety-nine offenders were successfully prosecuted after investigations and audits, demonstrating the Authority's thrust to fight tax evasion," Chitanda said.

Despite stronger enforcement activity, the report showed a decline in remittance performance.

Total remittances received stood at 867 946 against expected remittances of 1 509 631, resulting in a remittance rate of 57,49 percent, down from 75,44 percent recorded in 2024.

The figures suggest that while more taxpayers are being identified and assessed, many are still failing to fully settle their tax obligations.

"ZIMRA remittances are the actual payment of taxes after filing returns, essential for sustaining revenue collection, maintaining compliance and avoiding penalties," Chitanda said.

The authority also reported progress in resolving tax disputes.

During the year, ZIMRA received 155 objections, 38 appeals and five applications for advance tax rulings. Of these, 174 cases were finalised, representing a resolution rate of about 88 percent.

"ZIMRA is open to objections and appeals in a formal, legally structured way, balancing taxpayer rights with the need to maintain compliance," Chitanda said.

"Dialogue and education are encouraged, but taxpayers must follow proper procedures and timelines are to be considered," she said.