GVT moves to formalize all retailers

Nyashadzashe Ndoro

Chief Reporter

Cabinet has approved a comprehensive set of measures aimed at addressing challenges in the formal business environment, as presented by Finance Minister Professor Mthuli Ncube.

The government seeks to bring all businesses into the tax bracket and enhance the effectiveness of the foreign exchange market. To achieve this, Cabinet has introduced a range of short and long-term interventions.

One of the key short-term measures is the compulsory use of electronic money for all businesses. This will be achieved through the introduction of a compulsory tax payment system, ensuring that every eligible taxpayer pays tax. A Domestic Inter-agency Team will also be established to ensure informal sector compliance with tax laws.

Furthermore, a framework will be introduced to ensure that vendor licensing by local authorities is done in consultation with Central Government.

As part of this framework, all vendors will be required to use Point of Sale (POS) machines and open bank accounts upon registration/licensing.

In the medium-term, the government will focus on streamlining processes, fees, and charges to reduce the cost of doing business. Strict compliance with the Indigenisation and Empowerment Act will also be ensured, reserving certain sectors for local businesses.

To support local industry, procurement of goods and services will be enforced from local producers and suppliers. The government will also expedite the construction of power plants and upgrading of the distribution network to enhance electricity availability.

Additionally, the use of alternative sources of energy will be incentivised, and social protection coverage will be expedited for the informal sector.

Cabinet has also endorsed the refinement of the Foreign Exchange Management system, reduction of foreign currency retention levels for exporters from 75% to 70%, and reduction in bank charges. Minimum Deposit Interest Rates will also be introduced.

These measures, according to the government, aim to create a conducive business environment, enabling Micro, Small, and Medium Enterprises to graduate into formal businesses and drive economic growth.