The City of Harare has announced a significant reduction in shop license fees. The move is intended to alleviate the financial burden on businesses and stimulate growth in a sector that contributes 60% of Zimbabwe’s GDP, reported Zimbabwe Economic Review.
The council said the new fee structure introduces flexibility, offering various payment options to suit different business needs.
Businesses can now pay license fees monthly, quarterly, biannually, or annually.
Additionally, the fees will now be categorized based on the size of the business: small businesses will pay US$400 annually, medium businesses will pay US$600 annually, and large businesses will pay US$800 annually.
The local authority explained that this reduction responds to widespread complaints from SMEs regarding high fees and the rigid non-transferability of licenses.
By lessening these costs, Harare aims to encourage the growth of SMEs, which is essential for economic stability, especially given the large informal economy resulting from company closures, currency instability, and inflation.
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The Harare City Council has lowered shop license fees to help businesses grow. The new fee structure allows businesses to pay monthly, quarterly, biannually, or annually. Small businesses pay $400 per year, medium businesses pay $600, and large businesses pay $800. This change aims to support small and medium-sized businesses (SMEs) that have complained about high fees. By reducing costs, Harare hopes to help SMEs, which are important for the economy, especially with many companies closing and inflation in Zimbabwe.

Harare City Council Cuts Shop Licence Fees

People in Harare are complaining about the very high fees for shop licenses, which businesses find too expensive. When applying for a license, there is a US$72 fee for inspection. If the inspection goes well, businesses then pay the actual license fee which varies depending on the desired category. On average, it amounts to approximately US$1000.
Simba Nyamadzawo, the founder of Infinite Inspiration Group (IIG), a Harare-based Leadership &amp; Motivation Company, believes that the fees are excessive, particularly for small and medium-sized enterprises (SMEs) with limited financial resources. He wrote an open letter to Harare Mayor advocate Jacob Mafume:
<blockquote>
Your worship @JMafume the shop license fees for @cohsunshinecity are exorbitant. What’s your take on that and can they be reviewed downwards. Alternatively could you break them down to allow quarterly payments. Tinzweiwo Mambo.
</blockquote>
Many people agreed with his views and called on the Harare City Council (HCC) to reconsider the excessively high license fees, which they believe are severely harming businesses.
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Mayor Jacob Mafume responded to the appeal stating that the local government authority will take the suggestions into account during the next budgetary planning. He said:
<blockquote>
We are doing the budget for this year soon after the elections. We had hoped to dollarise so that they can be set at 2010 levels which people were comfortable with but that was shot down.We will look into quarterly payments as you suggest .
</blockquote>
The Mayor has made previous promises to initiate a review. Specifically, in March of this year, the Mayor stated that the city officials should reevaluate the fees associated with licensing. He said:
<blockquote>
A lot of people are complaining. If you move from a premise, you can’t move with your licence. You have to pay again. Even if you do renovations. We also need to look at our licensing payment methods. We might need to introduce a quarterly payment system so that people can lessen the burden of paying and we might need a reduction in the quantum. I got a call from the Hairdressers Association. They wrote a letter complaining about the fees which means it’s a serious issue. Something went wrong when we were preparing the budget because almost everything went up.
</blockquote>
Mafume further stated that they had directed the finance committee of the council to thoroughly examine and revise the license fees. This decision was prompted by grievances expressed by business operators in Harare following a significant increase of over 1,000% in shop license fees. Harare had raised the fees for non-factory shops and food purveyors to over ZWL$1 million, a substantial jump from the previous average of ZWL$200,000.
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Due to the fee increase, numerous business owners have expressed their intention to potentially shut down their shops and relocate from the central business district. Noted a business operator, Mr Chris Manguni:
<blockquote>
We are on the verge of closing shop because we are failing to pay the shop license fees. Our plea is that the responsible authorities review downwards the operator’s fees or else we are left with no option, but to close our shops which are sustaining a lot of families. 
</blockquote>
In January this year, the Ministry of Local Government and Public Works <a href="https://zero.pindula.co.zw/ninety-two-council-budgets-approved/">approved ninety-two budgets</a> for 2023 presented by local authorities, with four being rejected for various reasons.
A number of small to medium enterprise businesspersons <a href="https://zero.pindula.co.zw/businesses-in-harare-challenge-licence-fee-hike/">signed a petition</a> against the increase saying they were not consulted on issues of city budgets. One businesswoman operating hair salons in the capital said her licence fee went up from US$400 to US$640.
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