Zimra introduces measures to protect value chain integrity

ZIMBABWE Revenue Authority (Zimra) has begun implementing measures to protect value chain integrity and transparency to counter unfair competition by informal traders, a development that would result in only licensed and tax-compliant operators procuring goods from manufacturers and wholesalers.

During the presentation of the 2024 National Budget, Minister of Finance, Economic Development and Investment Promotions Professor Mthuli Ncube proposed that in order to restore the supply chain from the manufacturer, wholesaler to retailer, only licensed and tax-compliant operators procure goods from manufacturers and wholesalers.

He therefore proposed that only traders registered for value added tax (VAT) purposes and in possession of valid tax clearance certificates be eligible to procure goods from manufacturers.

It is in this background that Zimra has started calling for the informal sector to register with them and be tax-compliant.

“Our valued taxpayers are hereby notified that in terms of Finance (No. 2) Act 13 of 2023 the Minister of Finance, Economic Development and Investment Promotion introduced measures to protect value chain integrity and transparency and to counter unfair competition by informal traders.

“Informal traders are encouraged to register with Zimra using the mytaxselfservice.zimra.co.zw platform and be tax-compliant,” said the revenue authority.

Professor Mthuli Ncube

According to Zimra, the measures in the Finance Act state that a wholesaler must have a wholesale licence, be registered for VAT and have a valid tax Clearance Certificate to be able to procure goods from the manufacturer.

Zimra said wholesalers who are not VAT registered and do not have a tax clearance certificate are no longer allowed to purchase goods from a manufacturer and there is no limit of the value of goods that can be purchased.

Also, retailers must have a retail licence, be registered for VAT and have a tax Clearance Certificate for them to purchase goods from the wholesaler.

Zimra said retailers who are not VAT registered, informal traders and individuals who purchase from the same wholesaler should not exceed US$1 000 or its equivalent in ZWL at the prevailing auction exchange rate on the date of the purchase in a period of less than 30 days.

The above should also produce a receipt of goods purchased from the same wholesaler that is dated no earlier than 30 days from the date of the last purchase.

“Any person who purchases for the first time from that wholesaler in any calendar year, or if the person concerned cannot produce a receipt in proof of a previous purchase from the same wholesaler, such person can only purchase goods not exceeding US$20 or its equivalent in ZWL at the auction rate of exchange prevailing on the date of the purchase,” said Zimra.

Commenting on the new measures, Confederation of Zimbabwe Industries Matabeleland Chapter president Mr Joseph Gunda said the initiative is a positive move which only needs implementation and monitoring to ensure compliance.

He said the growing informal sector is falling short in terms of contributing towards revenue collection as many of them are not registered and at the same time imposing an unlevel playing field to the formal sector.

“It’s a development that we are monitoring. Manufacturers and businesses have highlighted these issues and we have been lobbying and submitting our papers regarding this issue during our annual congress. We highlighted that industry is declining and the level of informalisation is growing.

“We are so happy that the Government listened to us and we are positive that these measures will formalise our economy,” said Mr Gunda.

He said the prevailing situation whereby there are shops at every street corner and transactions happening there have no records for tax purposes was not good for the economy.

“This new approach will change the trading environment but Zimra should put into motion methods of monitoring and implementing these measures,” said Mr Gunda.-chonicle