News / Press Release
ZISO statement on informal sector to pay Aids Levy
22 May 2015 at 09:39hrs | Views
Zimbabwe Informal Sector's Organization (ZISO) wishes to respond to the government's proposal to collect aids levy from the informal sector. This was reported in the Financial Gazette (21/05/15-28-05-15) headlined "Informal Sector to Pay Aids Levy". ZISO notes the importance of the aids levy to the government's programme to alleviate the scourge of HIV and AIDS. There is no doubt that the levy is paramount to the close to a million patients who are on ARV therapy or on the waiting list.
It is however noteworthy to state that the majority of the people in the informal sector are there as a result of the government's failure to create employment and other economic opportunities in the formal sector. As a result, people have had to adopt survivalist strategies, living off hand-to-mouth incomes.
The majority of these groups hail from the most vulnerable sections of our society namely, the poorest, unemployed, women and youth. It is these very same groups that bear the brunt of the hazards of HIV/AIDS because of the squalid conditions they live in and lack of exposure and access to information, sexual protection and treatment.
By taxing the informal sector, government risks compelling the groups who need the most assistance to pay for their own support while the rich are spared the burden.
ZISO proposes the following recommendations:
1. Instead of burdening the people with the Reserve Bank of Zimbabwe (RBZ) debt, government must put measures in place to recover money from the firms and individuals that are liable and responsible for the RBZ debt. This will free funds from the taxpayers to augment the deficit in the aids levy without impulsively and punitively taxing the informal traders.
2. Government should proactively devise strategies to support the formalization and boost the operations of the informal sector. This will result in increased tax compliance and high revenue base.
3.Arrest chronic levels of corruption and unaccountability that has characterized the National Aids Trust Fund over the years.
4.Integrate the AIDS levy into the Value Added Tax (VAT) and foster better coordination between the Zimbabwe Revenue Authority
and local authority tax collectors to harness the levy.
5. Extensive stakeholder consultations on the appropriate and effective tax regime for the informal economy to enhance compliance and avoid arbitrariness.
6. Double efforts towards employment creation, revamping of industry and commerce and economic recovery.
It is however noteworthy to state that the majority of the people in the informal sector are there as a result of the government's failure to create employment and other economic opportunities in the formal sector. As a result, people have had to adopt survivalist strategies, living off hand-to-mouth incomes.
The majority of these groups hail from the most vulnerable sections of our society namely, the poorest, unemployed, women and youth. It is these very same groups that bear the brunt of the hazards of HIV/AIDS because of the squalid conditions they live in and lack of exposure and access to information, sexual protection and treatment.
By taxing the informal sector, government risks compelling the groups who need the most assistance to pay for their own support while the rich are spared the burden.
ZISO proposes the following recommendations:
2. Government should proactively devise strategies to support the formalization and boost the operations of the informal sector. This will result in increased tax compliance and high revenue base.
3.Arrest chronic levels of corruption and unaccountability that has characterized the National Aids Trust Fund over the years.
4.Integrate the AIDS levy into the Value Added Tax (VAT) and foster better coordination between the Zimbabwe Revenue Authority
and local authority tax collectors to harness the levy.
5. Extensive stakeholder consultations on the appropriate and effective tax regime for the informal economy to enhance compliance and avoid arbitrariness.
6. Double efforts towards employment creation, revamping of industry and commerce and economic recovery.
Source - ZISO
