Business / Economy
Govt targets informal sector on tax
10 Nov 2016 at 02:36hrs | Views
Financially troubled government of Zimbabwe is itching to tax the informal sector to raise revenue base.
Thousands of people have been retrenched from the formal sector in the process reducing taxable people.
Finance Minister, Patrick Chinamasa has sent a delegation to Ethiopia to study how the informal sector is taxed.
"I have already sent a delegation of officials to go and see what the Ethiopians do. We need to understand how they are doing it and learn from their experiences," he told 2017 budget workshop
He added "We need a lot of discussions; we are going to have a meeting with Minister (of Small and Medium Scale Enterprises, Sithembiso) Nyoni to try to understand this sector and try to see how we can collect revenue".
The Zimbabwe Revenue Authority (ZIMRA) recently said it would come up with more revenue collection strategies next year.
The taxman missed its revenue collection target by six percent in the six months to June 30, 2016.
It is estimated that between $3 billion and $7 billion is circulating in the growing informal sector, which has been described by government as the "the new economy".
Vendors are struggling to earn a living with unemployment in the country soaring above 85 %.
By taxing them, government could indeed be worsening their plight.
Thousands of people have been retrenched from the formal sector in the process reducing taxable people.
Finance Minister, Patrick Chinamasa has sent a delegation to Ethiopia to study how the informal sector is taxed.
"I have already sent a delegation of officials to go and see what the Ethiopians do. We need to understand how they are doing it and learn from their experiences," he told 2017 budget workshop
He added "We need a lot of discussions; we are going to have a meeting with Minister (of Small and Medium Scale Enterprises, Sithembiso) Nyoni to try to understand this sector and try to see how we can collect revenue".
The Zimbabwe Revenue Authority (ZIMRA) recently said it would come up with more revenue collection strategies next year.
The taxman missed its revenue collection target by six percent in the six months to June 30, 2016.
It is estimated that between $3 billion and $7 billion is circulating in the growing informal sector, which has been described by government as the "the new economy".
Vendors are struggling to earn a living with unemployment in the country soaring above 85 %.
By taxing them, government could indeed be worsening their plight.
Source - Byo24News
