High taxation stifles small business

High taxation levels and inflexible business licensing models are hindering the growth of the SME sector in the country, players in the industry have said.

SME sector representatives told Small and Medium Enterprises Cooperative Development Minister Sithembiso Nyoni during a meeting on Wednesday that Government needed to review tax levels and licensing models to save SMEs from collapse.

"Presumptive taxes demanded by ZIMRA are too high for most of our growing SMEs," said SMEs chamber president, Daniel Chinyemba. "Almost 10 SMEs in Zvishavane alone have collapsed after failing to pay presumptive taxes and many more countrywide are collapsing." The SMEs leader said a number of businesses in the sector were closing down due to numerous operational challenges, including outdated by-laws governing the sector.

Minister Nyoni pledged that Government was going to help SMEs grow. "The agenda should be SME growth and the Government is going to work on strengthening the informal sector," she said.

"If taxes are killing SMEs then there is need to sit down with ZIMRA and discuss the impact of presumptive taxes on the growth of informal traders"