News / National
Zimra tightens screws on businesses
04 Jan 2024 at 05:59hrs | Views
GOVERNMENT and the business sector are headed for a showdown after the Zimbabwe Revenue Authority (Zimra) yesterday announced a raft of tough measures limiting the formal traders' access to commodities from manufacturers and retailers.
According to the new measures, manufacturers can now only sell their goods to wholesalers who are registered for Value-Added Tax (VAT) and have tax clearance certificates.
The wholesalers would, in turn, only sell their goods to licensed and registered retailers while individuals can only buy goods worth not more than US$1 000 or its Zimbabwe dollar equivalent within 30 days.
The measures also target small businesses and individuals running flea markets, tuckshops, street vendors and hawkers among others.
Confederations of Zimbabwe Industries president Kurai Matsheza said the sector was still engaging government over the taxes imposed by Finance, Economic Development and Investment Promotion minister Mthuli Ncube.
"Most of the issues in the Zimra statement are an extract from the Act by the minister, but we are engaging authorities on the issues raised in the law," he said.
However, Centre for African Governance and Development and the Durban University of Technology professor Gift Mugano told NewsDay yesterday that government must scrap the proposed ban on traders from direct sourcing from manufacturers.
"With this proposed ban, the livelihood of more than six million traders in the informal sector is threatened. If the government sustains the ban, it must expect chaos ranging from massive smuggling of goods from neighbouring countries as well as massive evasion of tax and flooding of local products into the streets by local firms," he said.
He said the government should at least come up with VAT thresholds for micro, small and medium which are informed by realistic annual sales from each category of traders.
"The spirit of this submission is premised on the view that traders must never be excluded from the local supply chains because they draw their livelihoods from trading, especially in the absence of job opportunities," he said.
In a statement yesterday, Zimra announced that it would protect the value chain integrity and transparency, while countering unfair competition by informal traders.
"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," the statement read.
"Wholesalers which are not VAT registered and do not have a current tax clearance certificate and retailers are not allowed to purchase goods from a manufacturer. There is no limit of the value of goods that can be purchased," Zimra said.
Zimra also indicated that retailers who are expected to acquire goods from wholesalers must have a retail licence, registered with VAT, while having a current tax clearance certificate.
There is also no limit to the value of goods that can be bought.
According to Zimra, retailers without the requirements, including informal traders and individuals, would only purchase goods not exceeding US$1 000 or its equivalent in the Zimbabwean dollar in a period not exceeding 30 days.
"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 the previous purchase from the same wholesaler, such person can only purchase goods not exceeding USD20. 00 (or its equivalent in ZWL at the auction rate of exchange prevailing on the date of purchase)," Zimra said.
The authority also added that wholesalers should retain all copies of receipts produced in proof of previous purchases for at least three years.
It also encouraged wholesalers to scan and store the data in digital format in a manner approved by the Zimra commissioner.
"A wholesaler who was not operating a facility for the purchase of goods by a person other than a registered operator under the conditions as a specified in the table above before the 1st January, 2024, shall not avail such a facility after that date without the leave of the Commissioner in writing," Zimra said.
According to the statement, informal traders are individuals who carry on a trade for their own account but are not a registered operator including a hawker or street vendor.
The category, according to Zimra, also includes a person who sells articles at a place commonly known as a people's market or flea market. It also includes tuckshop operators selling goods on premises including residential but not licensable by the local authority for the sale of goods on a regular basis.
Zimra also included intermediaries who buy goods from manufacturers or wholesalers for resale to informal traders in the same category.
According to the new measures, manufacturers can now only sell their goods to wholesalers who are registered for Value-Added Tax (VAT) and have tax clearance certificates.
The wholesalers would, in turn, only sell their goods to licensed and registered retailers while individuals can only buy goods worth not more than US$1 000 or its Zimbabwe dollar equivalent within 30 days.
The measures also target small businesses and individuals running flea markets, tuckshops, street vendors and hawkers among others.
Confederations of Zimbabwe Industries president Kurai Matsheza said the sector was still engaging government over the taxes imposed by Finance, Economic Development and Investment Promotion minister Mthuli Ncube.
"Most of the issues in the Zimra statement are an extract from the Act by the minister, but we are engaging authorities on the issues raised in the law," he said.
However, Centre for African Governance and Development and the Durban University of Technology professor Gift Mugano told NewsDay yesterday that government must scrap the proposed ban on traders from direct sourcing from manufacturers.
"With this proposed ban, the livelihood of more than six million traders in the informal sector is threatened. If the government sustains the ban, it must expect chaos ranging from massive smuggling of goods from neighbouring countries as well as massive evasion of tax and flooding of local products into the streets by local firms," he said.
He said the government should at least come up with VAT thresholds for micro, small and medium which are informed by realistic annual sales from each category of traders.
"The spirit of this submission is premised on the view that traders must never be excluded from the local supply chains because they draw their livelihoods from trading, especially in the absence of job opportunities," he said.
In a statement yesterday, Zimra announced that it would protect the value chain integrity and transparency, while countering unfair competition by informal traders.
"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," the statement read.
"Wholesalers which are not VAT registered and do not have a current tax clearance certificate and retailers are not allowed to purchase goods from a manufacturer. There is no limit of the value of goods that can be purchased," Zimra said.
Zimra also indicated that retailers who are expected to acquire goods from wholesalers must have a retail licence, registered with VAT, while having a current tax clearance certificate.
There is also no limit to the value of goods that can be bought.
According to Zimra, retailers without the requirements, including informal traders and individuals, would only purchase goods not exceeding US$1 000 or its equivalent in the Zimbabwean dollar in a period not exceeding 30 days.
"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 the previous purchase from the same wholesaler, such person can only purchase goods not exceeding USD20. 00 (or its equivalent in ZWL at the auction rate of exchange prevailing on the date of purchase)," Zimra said.
The authority also added that wholesalers should retain all copies of receipts produced in proof of previous purchases for at least three years.
It also encouraged wholesalers to scan and store the data in digital format in a manner approved by the Zimra commissioner.
"A wholesaler who was not operating a facility for the purchase of goods by a person other than a registered operator under the conditions as a specified in the table above before the 1st January, 2024, shall not avail such a facility after that date without the leave of the Commissioner in writing," Zimra said.
According to the statement, informal traders are individuals who carry on a trade for their own account but are not a registered operator including a hawker or street vendor.
The category, according to Zimra, also includes a person who sells articles at a place commonly known as a people's market or flea market. It also includes tuckshop operators selling goods on premises including residential but not licensable by the local authority for the sale of goods on a regular basis.
Zimra also included intermediaries who buy goods from manufacturers or wholesalers for resale to informal traders in the same category.
Source - newsday
