Council licence fees must not punish startups, say...

Council licence fees must not punish startups, says Simba Nyamadzawo

Zim Now Writer

Government must ensure the success of startups by promulgating favourable policies that nurture their growth, upcoming entrepreneur, Simbarashe Nyamadzawo has said.

This comes as there has been an outcry over City of Harare licence fees, which have forced a number of upcoming businesses to close shop.

In an interview with Zim Now, Nyamadzawo said the success of startups is very difficult to achieve, owing to the punitive tax and licence regimes in place, adding that council fees should be staggered while tax payable should take into consideration the size of the business.

“The City of Harare, for instance must stagger licence fee payments. Small businesses cannot afford these fees because they are yet to find their feet.

“The current operating environment is not kind to small businesses that are still trying to stand. As a country, we do not have an SME policy that protects small businesses. Small companies have challenges accessing financing. We must nurture our small businesses to make them grow.

Nyamadzawo added that the growth of Zimbabwe’s economy, in the long term, rests on these small businesses.

“These small businesses will grow into big corporates if policies are favourable. Currently, this is not the case.

“However, the National Youth Policy – promulgated about 12 years ago whose main tasks was ensuring that at least 25% of government procurement should come from the youths. Unfortunately, this was not followed through,” he said.

The youthful entrepreneur said that government should look at the small businesses with a view to ensuring their tax should not exceed certain thresholds until a certain point.

Donald Simango, a tailor in downtown Harare, said when the municipal police move around checking for compliance, most entrepreneurs disappear not because they are not willing to comply with the licence fee payments but rather that they cannot.

“We all want to pay. However, where do I get the close to US$1 000 per year when I am in this kind of business. Council should consider allowing people payment terms and the figure itself is exorbitant.

“It is designed to choke small businesses. Government must seriously consider making business favourable for small enterprises. We all want to formalise and at least pay some bit of tax to government and other fees t council as well.

Simango added that the high fees have forced the municipal police into accepting bribes from small businesses.

“There is this cat and mouse game with them and then if you are caught, you talk to them and pay maybe US$20 and they leave you. The streets are full of vendors who sell uniforms and other clothes and yet they do not pay even a dime to council. They are the ones who get the customers because they are naturally cheaper as they do not pay anything to anyone,” Simango said.