18,5k SMEs formalise operations
THE number of Small to Medium Enterprises (SMEs) that formalised their operations last year has increased to more than 18 500 from about 13 000 in 2017.
In an interview, Bulawayo Chamber of SMEs chairperson Mr Energy Majazi said the improvement on the number of registered SMEs was largely attributed to enforcement by the Zimbabwe Revenue Authority. As an association, he said they have also been encouraging informal entrepreneurs to register their operations with Zimra.
“More than 18 500 SMEs across the country have formalised their operations with Zimra but the figure could have been more if incentives had been offered for formalising operations,” said Mr Majazi.
He said his organisation was therefore appealing to Government to offer incentives to those SMEs that have formalised operations.
In 2017, Cabinet approved the SMEs formalisation strategy paving way for the reinforcement of the social contract and creation of sustainable decent jobs. The drive to formalise the sector comes on the back of study reports that about $5,7 billion is circulating in that market. However, the formalisation process has been met with resistance by some players who claimed benefits of formalising were outweighed by costs.
This has prompted Government to champion initiatives meant to encourage SMEs to register their operations with Zimra. Such mechanisms include funding facilities from the Reserve Bank of Zimbabwe such as the export finance facility, microfinance revolving facility of ($10 million), gold support facility ($150 million), cross border facility ($15 million) and the horticulture facility ($10 million).
According to a Finscope Micro, Small and Medium Enterprises (SMEs) Survey (2012), in Zimbabwe there are 2,8 million SME owners employing 2,9 million people, translating into 5,7 million people dependent on the sector, contributing more than 60 percent to the Gross Domestic Product. — @okazunga.