8 000 SMEs utilise open window

OVER 8 000 small to medium enterprises (SMEs) have taken advantage of the window opened by the Government to register their business with the Zimbabwe Revenue Authority (Zimra) and formalise their operations. Finance and Economic Development Minister Patrick Chinamasa extended an olive branch in his 2017 budget statement to SMEs, granting them six months’ special dispensation with effect from January 1 2017 to voluntarily approach Zimra and register for VAT purposes. The window, which closes on June 30 2017, has given opportunity to small businesses to register with Zimra where no questions will be asked and no retrospective collection of taxes are demanded. Acting Zimra commissionergeneral Mr Happias Kuzvinzwa told journalists during a media workshop in Bulawayo that over 8 000 SMEs had heeded the call to formalisation. He urged other players in the sector to come on board before the state revenue collector cracks down on errant players who would not have complied when the window closes.

“We have received an overwhelming response from SMEs who have come to formalise their operations taking advantage of the window, which was opened by Government. At the moment there are over 8 000 SMEs who have formalised their operations,” said Mr Kuzvinzwa.

“Those who would want to register and participate in the economy of this country are coming but those who would play catch may not come but we are saying the net is closing in and we will definitely deal with these tax evaders once the window has been closed.”

The acting commissioner general extended his appreciation to Small to Medium Enterprises and Cooperative Development Minister Sithembiso Nyoni, whom he said “has been very supportive and encouraging”.

Mr Kuzvinzwa encouraged small businesses even those in rural areas to keep proper business records so that they are taxed their correct dues to the revenue collector.

This comes in the wake of complaints by small businesses especially in the rural areas that they were being charged the same presumptive tax just like their urban counterparts, which they say is high considering the location of their businesses.

“Presumptive tax is not a tax regime that we would want to have in perpetuity. It is a regime we are using to encourage formalisation where you do your proper accounting and benefit from deductions and allowable when you do your tax connotations,” said Mr Kuzvinzwa.

Zimbabwe Chamber for Small to Medium Enterprises (ZCSME) deputy secretary general Mr Rabson Hove said his organisation was pushing their membership to formalise their operations.

He said ZCSME would very soon not recognise small businesses, which are operating at undesignated places.

Despite the dominance of the sector in the economy, most of the businesses have remained largely informal thereby limiting the sector’s contribution to the growth of the economy and revenue collection base.

It is estimated that 60 percent of the economy is composed of informal businesses. — @lavuzigara1.