By Chantelle Muzanenhamo
In a bid to address the challenges facing the formal sector and promote economic growth, the Ministry of Finance, Economic Development and has announced additional measures to tackle the informalisation of the economy.
The move comes after research and consultations with business and industry stakeholders revealed that formal businesses are struggling due to competition from the informal sector, poor management, poor corporate governance, smuggled imports, and high costs of doing business.
“The proliferation of smuggled imports-mostly in reserved sectors-which are being sold exclusively in USD, and the high cost of doing business among others, also contribute to the formal sector challenges,”read part of the statement from the Minister of Finsnce Professor Mthuli Ncube.
According to the Ministry, the measures aim to promote formalisation and tax compliance among informal traders, level the playing field between formal and informal businesses, and enhance the enforcement of regulations.
Among the measures announced include the mandatory use of point-of-sale machines by all informal traders, adoption of international best practices on tax payment, and discouraging manufacturers from supplying directly to end-users and the informal market.
The Reserve Bank of Zimbabwe has also been tasked with announcing additional measures to enhance the formalisation of the market through the Monetary Policy Statement.
Government has also vowed to streamline regulatory processes, fees, and charges, as well as duplication of work by government agencies, to reduce the cost of doing business.
Furthermore, the government will enforce the provisions of the Indigenisation and Economic Empowerment Act, which provides for reserved sectors, and provide additional incentives to support industry through the Industrialisation Fund.
With the rate at which formal organisations are closing down, there is growing concern about the sustainability of Zimbabwe’s economy. Reports indicate that many formal businesses are struggling to compete with their informal counterparts, leading to a significant loss of jobs and revenue.
In light of this reality, the public is hopeful that the newly announced measures will provide the much-needed support and structure to revitalize the formal sector. Business owners, workers, and consumers alike are looking to the government to not only enforce compliance but also to foster an environment that nurtures growth and stability.