Zimbabwe plans to compel vendors to use POS machines

The government is drafting a legal framework that would compel informal traders to use point-of-sale (POS) machines, in a move aimed at formalising the informal economy and broadening tax revenue collection.

According to the Ministry of Industry and Commerce, the legislation, expected to be tabled in Parliament later this year, is aligned with the Finance Act and designed to curb value-added tax leakages by ensuring that cash-based transactions in the informal sector are recorded and taxed.

Economist Persistence Gwanyanya welcomed the proposal, saying mandatory POS usage would enhance transparency and boost government coffers.
"The informal sector contributes significantly to our economy but remains largely untaxed due to the prevalence of cash transactions. Introducing a legal requirement for POS use will help to close this gap," he said.

"This will not only improve tax compliance, but also promote accountability among traders, enabling the government to mobilise more revenue for essential services."

Gwanyanya added that the benefits extended beyond taxation. "POS systems also reduce the risks associated with handling cash, such as theft and fraud, and provide informal traders with a digital record of their transactions. This can facilitate access to financial services like loans and insurance."

The Confederation of Zimbabwe Retailers noted that some sections of the retail sector, including grocery shops and tuckshops, have already adopted POS machines.

However, affordability and technical know-how remain major hurdles. Some informal traders have raised concerns about the costs of acquiring POS devices and the training required to operate them.

Gwanyanya stressed that enforcement must be accompanied by education and support. "The government must ensure that any enforcement measures are accompanied by education and support programmes to help traders to adapt," he said.

The Ministry of Industry and Commerce has pledged to engage stakeholders, including trader associations and financial institutions, to address these challenges before the regulations are rolled out.