Chronicle Editor
Senior Reporter
INFORMAL traders in Matabeleland have expressed eagerness to formalise their operations and contribute to the national revenue bases but are worried that taxes charged by the Zimbabwe Revenue Authority (Zimra) and local authorities might push some of their members out of business.
Zimbabwe’s informal sector has grown significantly over the past decade, which has seen a staggering 2,8 million informal businesses sprouting across the country.
Formalisation of the SME sector presents a lot of opportunities to small businesses including access to cheap capital, as well as access to markets that have been dominated by imported goods for years.
Most SMEs have often called for the Government to level the field so that they are not disadvantaged when they register their business.
As part of efforts to regularise the sector, a one-day national formalisation strategy and implementation validation workshop was held in Bulawayo on Tuesday with informal traders drawn from four provinces – Bulawayo, Matabeleland North and South and the Midlands.
Speaking on the sidelines of the workshops, informal traders from the Matabeleland North and South said several bottlenecks are stalling the formalisation process.
Chairperson for Beitbridge Informal Cross Border Traders Association, Mr Mafios Macheka, said despite initial skepticism from informal traders to embrace the process, they are slowly warming up.
“Our members are willing to formalise but some are skeptical about the issue of taxes. The feeling is that once they register their businesses, Zimra is going to charge taxes that would leave one bankrupt, and that is a major challenge we face,” he said.
“However, the formalisation strategy programme workshop done in Beitbridge in December last year, many people are now warming up to the idea.
“Most of our members are conducting business in temporal local authority’s spaces, which have no meaningful structures, which are suitable to facilitate the fomalisation process.”
On funding, Mr Macheka said the sticking issue was always on the security required by lending financial institutions as well as financial literacy gap among members, which makes applying for a loan difficult.
Gwanda chapter Informal working group chairman, Mr Michael Ndlovu, said most members were concerned by taxes levied by the revenue authority.
“In Gwanda, most of our members are struggling to repay loans applied for pre-Covid -19 era. Interest rates are now exorbitant,” he said.
“On formalisation, most of our members are worried that once they are registered, they won’t be able to pay regular taxes to Zimra, which they think are too high. People are opting to trade without being registered.”
An informal trader from Hwange, Mr Layide Mhangi, said their peers were eager to operate as registered traders but local authorities are dragging the process by not availing suitable facilities.
“Traders in Hwange are keen to formalise but the challenge is lack of proper trading spaces. Local authorities must assist informal traders and construct proper spaces,” he said.
“We are willing to formalise, register and grow in business but that is impossible when local authorities are not giving us suitable facilities,” Mr Mhango said.
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