Govt launches door-to-door crackdown on smugglers

Government has initiated a door-to-door crackdown to confiscate smuggled goods that are flooding the country, especially during the festive season.

Those found in possession of smuggled items will face imprisonment without the option for bail.

This operation comes in response to huge losses of up to US$1 billion due to smuggling activities along the borders that the country is incurring annually.

The crackdown coincides with the peak season for smuggling as many Zimbabweans return home for the Christmas and New Year holidays, often bringing goods from South Africa and other neighbouring countries.

Addressing journalists yesterday, Engineer Tafadzwa Muguti, the Permanent Secretary for Presidential Affairs in the Office of the President, announced that a taskforce has been deployed to all major border posts and key roads to prevent the entry of smuggled goods.

“This December, we will have inter-governmental agencies stationed at our major border posts to ensure zero tolerance for smugglers. The task force will conduct door-to-door inspections of all goods in wholesale and retail shops,” he said.

The operation will also target wholesalers, supermarkets, and tech shops, with smuggled products including a variety of food items, clothing, drugs, beverages, fertilisers, cement, vehicles, electrical gadgets, and solar panels.

Eng Muguti said the Government’s goal was to ensure that the local industry was protected against cheap, often counterfeit products that pose a health risk to consumers.

“I want to issue a stern warning to Diasporans returning for the holidays. We often see rising prices and increased black market trading as they come back. Many choose not to declare their groceries and attempt to smuggle in illicit alcohol and other items, be aware that there will be no fines for violations at roadblocks; rather, those caught will be arrested on the spot. You risk spending Christmas behind bars if you engage in these activities,” he said.

Last month Government formed a taskforce led by the Ministry of Industry and Commerce that will lead in the crackdown on smuggling.

The taskforce includes various Government agencies such as the Zimbabwe Revenue Authority (Zimra), the Zimbabwe Republic Police, the Reserve Bank of Zimbabwe (RBZ), and the Consumer Protection Commission.

Eng Muguti warned Government officials against engaging in corrupt practices, stating that surveillance systems have been implemented across roadblocks and within the transport sector.

Since January, authorities have arrested 15,181 individuals for smuggling. The crackdown also targets businesses that use parallel market exchange rates and sell counterfeit, underweight, or unlabelled products.

To enforce compliance, 24-hour roadblocks have been established along highways leading into major cities, with multi-agency teams inspecting vehicles suspected to be carrying smuggled goods.-herald

‘Expanding tax base may allow tax relief’
‘Expanding tax base may allow tax relief’ Treasury has prescribed the mandatory registration, for corporate and personal income tax, of fabric, clothing merchandisers/boutiques, spare parts dealers, car dealers, grocery and Kitchenware merchandisers, hardware operators and lodges
Tapiwanashe Mangwiro

Senior Business Reporter

Efforts by the Treasury to widen the tax base, through extending the tax bracket to taxable areas such as churches and the informal sector, could significantly expand the sources of fiscal revenue and allow for the reduction of certain taxes in deserving areas, economic experts say.

This would result in a win-win scenario for both taxpayers and the Government.Notably, this comes after Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, proposed several tax measures in his 2025 national budget, to bring the emerging economy and certain business activities of religious entities into the tax loop.

“In order to provide an opportunity for the Emerging Sector to contribute to the Fiscus, I propose to enhance the provisions of 206the aforementioned legislation and prescribe for the mandatory registration for Corporate and Personal Income Tax for the following operators: fabric merchandisers, clothing merchandisers/boutiques, spare parts dealers, car dealers, grocery and kitchenware merchandisers, hardware operators and lodges. “

Furthermore, I propose that the above-mentioned operators be mandated to regularise registration of their operations with the Zimbabwe Revenue Authority, transact through point-of-sales and maintain records of all transactions, by January 1, 2025,” Minister Ncube said.

The policy intervention makes a lot of sense given how the economy has reconfigured since the turn of the millennium, from being dominated by registered large-scale businesses to a small enterprise, often informal, based marketplace.

Expanding the fiscal tax base, including by incorporating previously taxed sectors, is thus widely seen as a major solution to the long-standing issue of levying overstretched compliant businesses while leaving evaders to go scot-free, yet enjoy or require similarly tax-funded public services as everyone else.

The untaxed entities enjoyed an unfair advantage over their registered counterparts in that they can offer customers grossly discounted prices, creating serious viability challenges for the compliant businesses.

“Taxation is about equity and fairness,” says Dingaani Ncube, a chartered accountant with over two decades of experience.

“Presently, the tax burden disproportionately falls on compliant individuals and businesses, particularly large corporations.

If we expand the tax net to include underrepresented groups like SMEs and religious organisations, we could reduce tax rates across the board.”

Mr D Ncube estimates that broadening the tax base could allow tax rates to be moderated by at least 500 basis points, potentially lowering corporate tax rates from 25 percent to 20 percent.

While the percentage may seem small, the cumulative impact on businesses and the economy could be significant.

The issue of most SMEs not paying taxes has been a contentious one.

While SMEs are often lauded as the backbone of many economies globally, contributing significantly to employment and gross domestic product (GDP), many operate informally and avoid paying taxes.

Economist Mr Takudzwa Maredza, highlighted the scale of the problem.

“The perception that SMEs are highly profitable is often misleading. Many operate on thin margins, but that does not exempt them from contributing to national development.

“By not paying taxes, they are effectively shifting the burden onto compliant taxpayers,” Mr Maredza explains.

According to the Zimbabwe Revenue Authority (ZIMRA), SMEs constitute about 60 percent of the country’s economic activities but contribute less than 5 percent to tax revenues.

Mr Maredza commended ongoing Government efforts to formalise SMEs and introduce simplified tax regimes tailored to their scale saying this could help address the unfair playing field.

“Governments in other countries have successfully implemented turnover-based taxes or presumptive taxes for SMEs. This ensures they contribute something without being overburdened,” he said.

Another under-taxed sector is religious organisations, many of which generate substantial income through donations, events, and investments. While their charitable activities are often exempt from taxation, some argue that their commercial ventures should not be.

Mr Namatai Maeresera, an economic analyst, emphasised the need for a balanced approach.

“Taxing churches is a sensitive issue, but we need to distinguish between their charitable work and income-generating activities.

If a church owns a farm or a shopping mall, why should that income be tax-free when a private individual doing the same is taxed?”

He believes that taxing commercial activities of religious organisations could bring in significant revenue without compromising their core mission.

Broadening the tax base could also have broader economic benefits. With more revenue, the Government would have greater capacity to invest in infrastructure, health, and education, as well as increase public sector salaries to stimulate demand.

“Tax revenue is the lifeblood of any economy,” Mr Maredza pointed out. “When the Government has more resources, it can invest in projects that create jobs and improve living standards.

This, in turn, boosts consumer spending, creating a virtuous cycle of growth.”

However, the economic experts cautioned that reforms must be implemented carefully to avoid stifling growth in nascent sectors. “The goal is not to punish SMEs or churches but to create a fair and inclusive tax system,” Mr D Ncube stressed.

As policymakers weigh their options, the message from the experts is clear; broadening the tax base could lead to lower rates, fairer contributions, and a stronger economy.

For compliant taxpayers, the prospect of relief from over-taxation would be a very welcome development.
-herald