The new
directive, now being implemented in direct consultation with the Government,
aims to formalise informal traders and enhance tax compliance.
Currently,
local authorities have the sole mandate of registering and licensing vendors
operating within their jurisdictions. However, under the new system, the
registration process will also incorporate tax compliance measures to ensure
all eligible vendors contribute to national revenue.
In his
post-Cabinet briefing on Tuesday, Information, Publicity, and Broadcasting
Services, Dr Jenfan Muswere, said the initiative would be rolled out alongside
the introduction of a compulsory tax payment system.
This is
designed to ensure all informal businesses comply with tax regulations. To
oversee this, the Government will establish a Domestic Inter-agency Team to
enforce compliance within the informal sector.
Dr Muswere said
Cabinet approved several measures to address challenges in the formal business
environment, as presented by the Minister of Finance, Economic Development, and
Investment Promotion, Professor Mthuli Ncube.
Following the
presentation of the Monetary Policy Statement by the Reserve Bank of Zimbabwe
on February 6, 2025, Cabinet identified several economic challenges and has
since introduced a range of short and long-term interventions. These measures
aim to stabilise the economy and support Micro, Small, and Medium Enterprises
(MSMEs).
“In broad
terms, the Government seeks to bring all businesses into the tax bracket and
enhance the effectiveness of the foreign exchange market. In the long-term,
Government will address the business environment to streamline fees, and
charges and minimise duplication of work by Government agencies as well as
improve electricity supply,” he said.
Dr Muswere
added that a key short-term intervention includes making the use of electronic
money compulsory for all businesses, ensuring greater financial transparency
and efficiency.
He further
stated that Cabinet endorsed the refinement of the foreign exchange management
system. Key measures include reducing the foreign currency retention level for
exporters from 75 percent to 70 percent, cutting down bank charges, and
lowering minimum deposit interest rates.
Government has
adopted medium-term strategies aimed at reducing the cost of doing business.
These include streamlining regulatory processes, minimising fees and charges,
and eliminating redundant administrative procedures among Government agencies.
Dr Muswere said
these efforts are expected to shorten turnaround times and lower operational
costs for businesses.
He said
Government will also enforce strict compliance with the Indigenisation and
Empowerment Act, which mandates certain sectors to be reserved for locals.
Measures will
also be taken to promote local procurement, expedite power plant construction,
upgrade electricity distribution networks, and encourage the use of alternative
energy sources. Furthermore, social protection coverage for the informal sector
will be expanded.
“Government has
adopted the following short to medium-term measures aimed at supporting Micro,
Small and Medium Enterprises to formalise their operations; establishment of
designated workspace, the creation of a favourable regulatory environment,
adoption of simplified taxes and rates, strengthening provision of business
development support, enforcement of the ban on second-hand goods and engagement
of players in the informal sector,” said Dr Muswere. Chronicle
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