News / National
Zimbabwe tightens noose on informal sector
2 hrs ago | Views
The government has announced stringent measures aimed at protecting the formal sector from what it describes as unfair competition posed by informal traders.
In a statement released on Friday following an emergency meeting with captains of industry, Finance Minister Mthuli Ncube said the measures seek to level the playing field between formal and informal businesses. Among the key initiatives is a directive discouraging manufacturers from conducting business with informal traders.
The government has frequently blamed the informal sector for challenges that threaten the survival of traditional retail and wholesale chain stores. Last year, it introduced similar policies to regulate informal businesses, but concerns over their impact on the formal economy persist.
"Government is, therefore, proposing additional measures to promote formalisation and tax compliance by the informal sector, as follows: Mandatory use of point-of-sale machines by all informal traders; adoption of international best practices on tax payment, which ensures every eligible taxpayer complies, and leveling the playing field between formal and informal businesses by discouraging manufacturers from supplying directly to end users and the informal market," Ncube stated.
He also highlighted the need for a domestic inter-agency enforcement team to ensure compliance within the informal sector, emphasizing collaboration between local authorities and the central government in licensing and enforcement processes.
Additionally, the Reserve Bank of Zimbabwe is expected to introduce further measures through the upcoming Monetary Policy Statement to strengthen the formalisation of the market.
Ncube announced plans to provide additional incentives to support industry through the Industrialisation Fund, complementing existing incentives such as duty-free imports and Special Economic Zones benefits. The government will also streamline regulatory processes, reduce business costs, and enforce provisions of the Indigenisation and Economic Empowerment Act, which reserves certain sectors for locals.
The statement reiterated that the government will continue supporting local industry by prioritizing procurement of goods and services from domestic producers and suppliers. However, critics argue that while formalisation efforts are necessary, they should not come at the expense of millions of Zimbabweans who rely on informal trade for their livelihoods.
In a statement released on Friday following an emergency meeting with captains of industry, Finance Minister Mthuli Ncube said the measures seek to level the playing field between formal and informal businesses. Among the key initiatives is a directive discouraging manufacturers from conducting business with informal traders.
The government has frequently blamed the informal sector for challenges that threaten the survival of traditional retail and wholesale chain stores. Last year, it introduced similar policies to regulate informal businesses, but concerns over their impact on the formal economy persist.
"Government is, therefore, proposing additional measures to promote formalisation and tax compliance by the informal sector, as follows: Mandatory use of point-of-sale machines by all informal traders; adoption of international best practices on tax payment, which ensures every eligible taxpayer complies, and leveling the playing field between formal and informal businesses by discouraging manufacturers from supplying directly to end users and the informal market," Ncube stated.
He also highlighted the need for a domestic inter-agency enforcement team to ensure compliance within the informal sector, emphasizing collaboration between local authorities and the central government in licensing and enforcement processes.
Additionally, the Reserve Bank of Zimbabwe is expected to introduce further measures through the upcoming Monetary Policy Statement to strengthen the formalisation of the market.
Ncube announced plans to provide additional incentives to support industry through the Industrialisation Fund, complementing existing incentives such as duty-free imports and Special Economic Zones benefits. The government will also streamline regulatory processes, reduce business costs, and enforce provisions of the Indigenisation and Economic Empowerment Act, which reserves certain sectors for locals.
The statement reiterated that the government will continue supporting local industry by prioritizing procurement of goods and services from domestic producers and suppliers. However, critics argue that while formalisation efforts are necessary, they should not come at the expense of millions of Zimbabweans who rely on informal trade for their livelihoods.
Source - newsday
