Govt com­piles re­port on SMEs for­mal­i­sa­tion

Chronicle (Zimbabwe) - - Business - Oliver Kazunga

THE Gov­ern­ment is com­pil­ing a re­port and strat­egy on small and medium en­ter­prises’ for­mal­i­sa­tion to tap into the in­for­mal sec­tor.

Last year, the Gov­ern­ment an­nounced that it was for­mal­is­ing the SMEs sec­tor fol­low­ing ob­ser­va­tions that about $5,7 bil­lion was cir­cu­lat­ing in that mar­ket.

Of late, the Zim­babwe Rev­enue Au­thor­ity (Zimra) has not been able to raise much through cor­po­rate tax as a num­ber of com­pa­nies in the for­mal sec­tor have closed down due to the pre­vail­ing eco­nomic cli­mate.

The in­for­mal sec­tor has since been iden­ti­fied as a po­ten­tial source of rev­enue for the fis­cus as the econ­omy was now skewed to­wards SMEs.

Re­spond­ing to ques­tions from the floor dur­ing the Par­lia­men­tary 2017 pre-na­tional bud­get sem­i­nar in Bulawayo, Small and Medium En­ter­prises and Co-op­er­a­tive De­vel­op­ment Min­is­ter Sithembiso Ny­oni said: “We have started a process fol­low­ing a study that we did to con­sult the SMEs sec­tor on for­mal­i­sa­tion so that they have a buy-in. A re­port and a strat­egy is be­ing com­piled, but let me just say that for­mal­i­sa­tion will not hap­pen re­ally with­out tar­geted sup­port”.

The min­is­ter was asked why it was tak­ing long to for­malise SMEs.

“We need tar­geted sup­port and re­sources to mo­ti­vate SMEs to have a buy-in into for­mal­i­sa­tion. Peo­ple will al­ways hon­our if they see value in the ser­vices that are be­ing pro­vided,” said Min­is­ter Ny­oni.

She said SMEs were cru­cial in eco­nomic de­vel­op­ment adding that presently, play­ers in the sec­tor be­ing made to pay a dol­lar per day to lo­cal au­thor­i­ties for them to op­er­ate.

How­ever, the min­is­ter said the monies be­ing paid to lo­cal au­thor­i­ties were not go­ing to the fis­cus but into the ur­ban coun­cils’ cof­fers.

“The ven­dors on the streets are con­tribut­ing to the lo­cal au­thor­i­ties a lot. Some of them have told us that they are thriv­ing on the ven­dors with be­tween 40 per­cent and 65 per­cent of their rev­enue com­ing from the SMEs.

“But now it is upon the Zim­babwe Rev­enue Au­thor­ity to come up with its own prod­uct so that to­gether we make sure that the SMEs pay to Zimra rather the dol­lar per day to lo­cal au­thor­i­ties,” she said.

Min­is­ter Sithembiso Ny­oni

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