The ManicaPost
Rumbidzayi Zinyuke Senior Reporter
Government has been urged to come up with tax packages that cater for Small to Medium Enterprises (SMEs) to increase the number of registered businesses in line with its thrust to formalise the sector.
Speaking at an SME formalisation workshop held in Mutare on Tuesday this week, Manicaland Chamber of SMEs business development officer Mrs Joselyn Sithole said most informal traders were afraid of registering their businesses because they did not understand the Zimbabwe Revenue Authority’s tax structures.
“Most informal traders do not understand tax matters; they have had only bad experiences with Zimra so you find that they are afraid of registering their businesses. Zimra should create a package tailor-made for SMEs so that you can be able to get more registered businesses than you have currently,” she said.
She said the tax authority should also consider creating a one stop shop where SMEs can get all the tax services under the same roof to avoid the hassle of moving from one office to the other.
Zimbabwe’s informal sector has grown significantly over the past decade, which has seen a staggering 2,8 million informal businesses sprouting across the country. Only 30 percent of those have registered businesses leaving a big chunk not contributing to the country’s coffers.
According to an SMEs survey conducted in 2012, a total 5,7 million jobs have been created from the 2,8 million small businesses. But most SMEs remain hesitant to formalise their operations as they fear the requirement to meet tax obligations.
Mrs Sithole said Government should demystify the role played by Zimra in the formalisation of the informal sector.
“It’s all about perception. You will need to deal with that negative perception that people have of Zimra.
“Encourage them to see the benefits of trading formally. If you only go to the people when you want to collect revenue, they will run away from you. This mentality of waiting for the people to come to you is not doing the SME sector or the country any good,” she said.
She urged the SMEs to formalise their business in anticipation of potential investment inflows into the country in the near future.
“When President Emmerson Mnangagwa went to Davos, he met with representatives of big conglomerates that showed interest in opening up shop in Zimbabwe. This means that there will be business for us when this happens. So I want to urge all SMEs to register because these companies will want to deal with formal businesses, not with informal traders. Just be ready so that you are not left behind when the investment comes,” she said.
Speaking at the same event, deputy director in the Ministry of Industry, Commerce and Enterprise Development Mr Kupukani Masunungure said Government had intensified efforts to increase the number of registered businesses this year.
“Government is aware of the high levels of informalisation in the country and this is unsustainable for the development of the economy.
“We are therefore targeting to register 15 000 new tax payers from this sector by April this year,” he said.
He said 13 000 new tax payers were registered across the country last year.
Formalisation of the SME sector presents a lot of opportunities to small businesses including access to cheap capital as well as access to markets that have been dominated by imported goods for years.
Most SMEs have often called for Government to level the field so that they are not disadvantaged when they register their business.
