Industry And Commerce Sectors Call For Government Intervention As Companies Close
The industry and commerce sectors in Zimbabwe have once again called for government intervention as more companies are forced to shut down due to the country’s struggling economy.
The formal retail sector continues to face major challenges, including high inflation, foreign currency shortages, and growing competition from informal traders.
In an interview with NewsDay this week, Zimbabwe National Chamber of Commerce (ZNCC) president Tapiwa Karoro said that the 5% withholding tax on non-registered micro, small, and medium enterprises (MSMEs) has discouraged informal traders from engaging with formal wholesalers, leading many transactions to move further underground. Said Karoro:
This has resulted in low tax compliance, reduced productivity, constrained investment and limited access to social security benefits.
While the 5% withholding tax on non-registered MSMEs [micro, small and medium enterprises] measure seeks to enforce tax compliance, it has inadvertently discouraged informal traders from engaging with formal wholesalers, thereby pushing more transactions underground.
Karoro has urged the government to introduce a graduated tax structure with lower initial rates to encourage voluntary registration among businesses.
He asserted that formalising the economy is vital for sustainable economic growth, increased tax revenue, improved business productivity, and greater investor confidence.
He further stressed that a combination of incentives, regulatory reforms, enforcement mechanisms, and digital transformation would be key to fostering a balanced and inclusive economic environment.
Meanwhile, the Consumer Council of Zimbabwe (CCZ) has expressed concern over the ongoing closure of formal retailers.
In a statement this week, the CCZ cited unfair competition from informal traders as a factor factor driving this trend.
The council also voiced its worries about the continued shutdown of formal retailers and wholesalers.
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