Govt Targets Informal Sector To Broaden Tax Base
The Government is targetting informal traders for taxation in a bid to increase revenue and also over fears that as the economy becomes more dollarised, the tax base could decrease by 25 percent as the informal sector fails to pay tax.
Zimbabwe’s economy is largely informal, and as a result, the country’s tax collection agency, the Zimbabwe Revenue Authority (ZIMRA) faces several challenges in raising revenue to fund the Government’s operations.
Business Times reported Treasury sources as saying the fiscal authorities were targetting foreign-owned shops among several strategies to broaden the tax base. Said a source:
The government has a programme that is targeted towards compliance with reserved sector regulations with particular attention to foreign-owned shops in the downtown area.
Those that have not complied are duly required and requested to comply with the law.
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Definitely, this will increase tax revenue into fiscus while reducing a lot of illicit transactions that have also been taking place in that area.
In his mid-term budget strategy paper, the outgoing Minister of Finance and Economic Development, Mthuli Ncube, said the Government will devise various strategies to increase its tax base. He said:
Achieving the target collections is underpinned by tax administration initiatives that enhance enforcement and tax compliance, in particular, of business processes and adoption of new technology, among other initiatives.
Expansion of the base through embracing emerging industries, including those in the informal sector, as well as capturing the digital marketplace where sellers and buyers of goods and services converge through e-platforms will ensure that eligible taxpayers contribute towards national development.
The president of the Confederation of Zimbabwe Retailers Denford Mutashu told Business Times that the integration of informal traders into the economy was a welcome development.
More: Pindula News
