Taxman targets informal sector

Mr Pasi

Mr Pasi

Peter Matambanadzo Senior Reporter
Government is working on a cocktail of measures to formalise small and medium enterprises so that they pay taxes and directly contribute to economic growth. Experts from South Korea will assist the Government in formalising a sector that is said to hold US$7,4 billion, most of which never — or only fleetingly — enters formal channels.
Fiscorp, a private financial company was funded by the World Bank in 2012 to assess Zimbabwe’s informal sector and its report — published, accepted and then launched by the Government in July 2013 — said billions of US dollars were being handled by unregistered SMEs.

The report stated that 5,7 million jobs had been created from 2,8 million small businesses, while 800 000 medium-sized firms were employing 2,9 million people.

Addressing delegates at a symposium organised by the National Business Council of Zimbabwe in Harare yesterday, Zimbabwe Revenue Authority Commissioner-General Gershem Pasi said the informal sector would soon start being formalised.

The symposium ran under the theme “Aligning indiginisation and Economic Empowerment Act with Zim-Asset — Opportunities for Business”.

“At the moment we are finalising programmes to bring order to various informal sectors and they should be launched within the end of the year so that we move and they start playing a meaningful role,” Comm-Gen Pasi said.

He said a Zimra; the Local Government, Public Works and National Housing Ministry; the Small and Medium Enterprises and Co-operatives Development Ministry; and other Government arms were working on the matter.

Comm-Gen Pasi said a team of experts from South Korea would be visiting Zimbabwe to assist with formalisation of the SMEs sector.

“One of the programmes we are also working on and Government will avail soon is the self-service centres. We are now going to be brining ARMs, Automated Revenue Machines; again we have our technical partners, I am sure they should arrive this week so that we finish our project.

“It is high time we protected and formalised the SMEs in order to preserve their diversity. We need to focus on how to nurture and provide decent accommodation and operating environment,” he said.

Comm-Gen Pasi said Zimra could not merely wait to tax businesses, but should assist in properly structuring them.

He said SMEs could grow into big brands as had been the case with Samsung and LG.

“If we create order we create areas where people can do honest business because every citizen must be proud of contributing to the nation by paying taxes,” he said.

Comm-Gen Pasi said chasing away vendors and other informal businesspeople from the street was akin to chasing away revenue.

“We can’t have revenue when we chase people away. We create order and create areas where people can do honest business and everyone must contribute to development of nation. We need an innovative way of creating that,” he said.

Economist Mr Witness Chinyama said the US$7,4 billion touted to be in the informal economy was not a far-fetched figure.

“The informal sector is vibrant and is very big. This is where the majority of the people are employed,” Mr Chinyama said.

Another economist Mr Best Doroh agreed that the informal sector was growing significantly, but quirried the US$7,4 billion figure.

“Yes the informal sector has been absorbing all excess labour, but it’s difficult to say the figure is correct. We need to carry out a comprehensive and detailed study to demistyfy the figure,” Mr Doroh said.

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