Golden Sibanda : Senior Business Reporter

THE Zimbabwe Revenue Authority may frustrate efforts to formalise the informal sector if the taxman continues to demand high taxes on newly registered entities, a Cabinet Minister has said. The minister also said to support growth of the SMEs, which now employ and sustain the majority of people in the country, Government should do 25 percent of its procurement from the sector.However, the minister stressed the need to ensure that the SMEs sector, which is predominantly made up of unregistered entities, formalises since Government cannot contract informal entities.

Addressing delegates at the annual business conference of the 57th edition of the Zimbabwe International Trade Fair yesterday Small, Medium and Cooperative Development Minister Stembiso Nyoni said 70 percent to 75 percent of the SMEs were not registered.

The Minister said the revenue collector must not hound SMEs that come forward to be registered and drive them back into hiding, as it has recently pounced on the ones that had formalised.

She said in one instance the tax collector had instantly demanded $154 000 from newly registered SMEs in Gweru, which was eventually whittled down to $50 000 after some protracted discussion.

She said the SMEs must be the ultimate beneficiaries of the formalisation initiative and should be given recognition as participants in and part of inclusive process towards economic growth.

Minister Nyoni challenged established corporates to take a cue from what food processor Cairns Holdings is doing to support SMEs by organising them and contracting small farmers for raw materials.

Further, the minister said supporting the growth of the SMEs, was President Mugabe’s vision, which he supported by dedicating a fully-fledged ministry led by a Cabinet minister to promote the SMEs.

As such, she said the formalisation of the informal sector to grow SMEs was a collective effort, which must see all stakeholders working hand in glove to foster development of the entities.

The minister said the Ministry of Local Government and Urban Development should facilitate growth of SMEs by providing workspace to enable them to thrive and not close down informal SMEs.

The financial services sector, she said, must also play its part by developing financial instruments tailor made for the informal sector and upcoming SMEs, which are different from those of big firms.

Minister Nyoni said SMEs should be regarded as a blessing, as they create jobs and sustenance for millions, and not a curse to the country.

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