Harare, (New Ziana) – Vendors in the country are expected to be issued with Point of Sale (POS) machines and required to open bank accounts on obtaining licences for their operations, the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube has said.
Prof Ncube was fielding questions on the cocktail of measures adopted by the government to address challenges in the formal business environment in the country during a post Cabinet media briefing on Tuesday.
Formal businesses in the country, especially the retail and wholesale sectors are in the grip of a crisis after the closure of several branches of the Ok Supermarket chain and N. Richards Wholesale groups amid concerns in government over the growing informalisation of the economy.
In addition to the closure of some retail outlets, stakeholders claim those still in operation are facing an uncertain future amid growing pressure on volumes, exchange rate volatility and viability, due to the mounting competition from informal traders who include street vendors and tuckshops among others.
Earlier, the Cabinet had approved a report Prof Ncube presented on the cocktail of measures to address the challenges adversely impacting the economy following last week’s Reserve Bank of Zimbabwe Monetary Policy Statement.
Cabinet took note of the negative factors and agreed on the cocktail of short and long-term interventions aimed at addressing challenges in the economy and providing support to micro, small and medium enterprises.
“In broad terms, the government seeks to bring all businesses into the tax bracket and enhance the effectiveness of the foreign exchange market. In the long-term, government will address the business environment in order to streamline fees, charges and minimise duplication of work by government agencies as well as improve electricity supply,” said a briefing by Prof Ncube’s counterpart, Dr Jenfan Muswere, the Minister of Information, Publicity and Broadcasting Services.
“Such an environment will enable MSMEs to graduate into formal businesses. Under short term measures, the use of electronic money will now be compulsory for all businesses.”
This is expected to be achieved through the introduction of a compulsory tax payment system to ensure that every eligible taxpayer pays tax, establishment of a Domestic Inter-agency Team to ensure informal sector compliance with tax laws and introduction of a framework which ensures that all vendor licencing by local authorities is done in consultation with Central Government.
Cabinet further endorsed refinement of the foreign exchange management system, the reduction of the foreign currency retention level for exporters from 75 percent to 70 percent, a reduction in bank charges, and minimum deposit interest rates.
Cabinet also adopted medium-term measures to ease the cost of doing business by streamlining processes, fees and charges, and duplication of work by government agencies to reduce the turnaround and cost to business, ensure strict compliance with the Indigenisation and Empowerment Act which provides for certain reserved sectors and enforce the procurement of goods and services from local producers and suppliers in order to support local industry.
The government will also want to expedite the construction of power plants and upgrading of the distribution network to enhance the availability of electricity and to incentivise the use of alternative sources of energy and social protection coverage to the informal sector.
Among the proposed measures to support the micro, small and medium enterprises (MSMEs), the Cabinet adopted short to medium-term measures to formalise their operations.
These include the establishment of designated workspace, creation of a favourable regulatory environment, adoption of simplified taxes and rates, strengthening provision of business development support, enforcement of the ban on second hand goods, and engagement of players in the informal sector.
New Ziana
