Speaker of the National Assembly, Jacob Mudenda, says the government should urgently modernise the taxation systems and also formalise the informal sector for accelerated economic transformation.
The World Bank estimates that Zimbabwe’s informal sector dominates 60 percent of the economy but the Vendors Initiative for Social and Economic Transformation (VISET) puts the figure at 92%.
Speaking at the 2023 Pre-budget seminar last Friday running under the theme “Leveraging on domestic resource mobilisation to accelerate Economic Transformation”, Mudenda said:
Domestic resource mobilisation can be achieved if we spruce up our taxation regime through a sustainable digital taxation system.
This will ensure the maximisation of revenue collection thereby guaranteeing optimum resource mobilization through the taxation avenue.
Treasury should invest expeditiously in this area. In tandem, the formalization of the informal economic sector is long overdue.
Let us learn from Bolivia, Bangladesh, and Iran how these countries have exponentially formalized their informal economic sector.
At the moment, 60% of our economy is in the informal sector. If and when we formalize it, we are likely to increase the tax base and in so doing enhance our domestic resource mobilization for accelerated economic transformation.
In 2015, and then again in 2021, the government held discussions to develop a formalisation policy for Small to Medium Enterprises (SMEs) but nothing has been done to date. | Open Parly