FIU keeps eye on manufacturers, informal sector

THE Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU) is keeping a close eye on manufacturers that are supplying goods to the informal sector to mop up US dollars while either rejecting payments in the local currency or charging punitive rates.

FIU director-general Mr Oliver Chiperesa said although they have noticed high levels of compliance on the exchange rate by businesses, they were concerned by the latest developments. “Our only worry at this moment is with some major manufacturers and suppliers; those are the ones that we are now targeting going forward because they continue to favour supplying goods to the tuckshops downtown because they pay cash upfront,” he said.

By flooding goods on the informal market, he added, manufacturers could also be evading tax.

“When they supply those products, they don’t record them in their books, so they evade tax in the process.

“Maybe that is also another motivation for them to supply goods to the informal sector because they are doing it without recording in their books.”

Mr Chiperesa said policy measures introduced by the Government and the Reserve Bank of Zimbabwe to stabilise the exchange rate have proved effective.

“So, that stability we are witnessing is going to continue for the foreseeable future,”he said.

Retailers have raised concern over informal traders whom they accuse of unfair advantage since they pay for multiple licences.

However, in remarks at the recent Zimbabwe Economic Development Conference in Victoria Falls, Permanent Secretary in the Ministry of Finance and Investment Promotion Mr George Guvamatanga criticised formal businesses for failing to respond to evolving economic dynamics.