Govt explores simpler compliance for SMEs
THE Government is working to streamline the compliance processes for small retailers to promote their transition to formal business operations.
This comes as Zimbabwe’s economy is now considered to have the second largest informal sector, relative to the size of the economy, estimated to account for nearly 61 percent of its Gross Domestic Product, according to the International Monetary Fund.
As such, the Government is seeking to address this issue as it pushes to create a more formal local economy.
Zimbabwe’s informal economy has been growing rapidly over the years, cross-cutting diverse economic sectors as locals find innovative ways to fend for themselves.
As such, this has led to the emergence of several informal businesses that operate outside the formal tax systems and do not fulfil their tax obligations.
Onlookers say the growing informalisation, while providing limitless opportunities to locals, is undermining the Government’s goal to grow tax revenue to finance key programmes.
Addressing delegates at the Confederation of Zimbabwe Industries (CZI) Business Breakfast Meeting in Bulawayo, Industry and Commerce Minister, Mangaliso Ndlovu, said he was keen to forge close collaborations between government and business to find lasting solutions in coming up with a more formal economy.
“It is important that compliance procedures for small retailers be simplified to encourage them to formalise, as well as enforce the route to market mechanism,” said Minister Ndlovu.
He said the proliferation of the non-compliant small retail stores was contributing to the flooding of smuggled and counterfeit products, adding that it was threatening the local industry and posing health and environmental hazards due to the prevalence of sub-standard products.
Consequently, the Government is looking at enforcing the Consumer Protection and Trade Measures legislation to safeguard against smuggled, counterfeit, and substandard goods, protecting consumer health and welfare.
There are formal and informal SMEs in Zimbabwe’s economy, which remain one of the local economy’s conundrums and the Government keeps searching for ways to incorporate the informal sector into the mainstream economy and also to promote the growth of formal SME’s.
The compliance issue is not only limited to the retail sector but the SMEs segment is calling for simplified taxation to encourage formalisation.
In developing countries simplified taxation for micro and small enterprises (MSEs) is generally introduced to facilitate voluntary tax compliance and remove obstacles in moving toward business formalisation and growth.
Minister Ndlovu said the drive to forge close collaborations between government and business was coming at a time when the Ministry of Finance has presented an elaborate citizen and business-centric roadmap towards the development and launch of our National Development Strategy 2, which will be launched in November 2025.-herald
