Relief for retailers as Govt drastically slashes fees, consolidates licences

Professor Mthuli Ncube

Sunday Mail Reporters

IN a sweeping move designed to ease the burden of steep fees for retailers and small businesses, the Government yesterday consolidated 11 fragmented local authority licences into a single unitary business licence as part of a radical overhaul of the licensing regime for the wholesale and retail sectors.

The reforms, announced as part of the ongoing ease of doing business initiative, follow similar successful reforms in the livestock, tourism and transport sectors.

They also directly address one of the biggest complaints from business owners — the fragmentation and high cost of compliance.

The cornerstone of the new policy is the consolidation of 11 different local authority licences into a single, unified shop licence. This is a game-changer for businesses that operate multiple lines under one roof, such as a combined bakery, butchery and restaurant.

“Previously, a food factory licence alone could set a business back as much as US$2 300. Now, that entire cost, along with 10 others, is swept away into one simple licence,” said Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube in a statement yesterday.

The relief extends across the board.

Bottle stores operating within a licensed retail shop will no longer need a separate licence, while businesses dealing in both wholesale and retail will require only a single permit.

Integrated factories and retail outlets on the same premises will be covered by one licence, slashing regulatory costs.

Further, supermarkets are freed from Zimbabwe Tourism Authority licence requirements, unless they are in designated tourist areas.

In a direct bid to support small and medium enterprises (SMEs), the Government has mandated that local authorities implement a sliding scale for licence fees, with a firm cap of US$500.

This measure is designed to ensure that the cost of doing business remains proportionate to the size of the enterprise, providing significant relief to smaller operators.

The Medical Control Authority of Zimbabwe has also scrapped the permit for the sale of veterinary products, as its functions overlap with those of the Department of Veterinary Services.

“The retail sector is one of the fastest growing sectors in Zimbabwe, and to further strengthen it, Government has moved to remove the fragmentation of licences,” added Prof Ncube.

The reforms extend beyond the core retail sector, incorporating changes announced for tourism and other areas that impact business owners.

Tourism businesses, including hotels and lodges, have seen their licence fees reduced by 50 percent, also capped at US$500.

The controversial change of property use fee has been capped at US$1 000, down from highs of US$3 500.

Effluent waste management costs have been more than halved, from US$575 to US$200 per year.

Liquor licensing has been simplified, with the Liquor Licensing Board compressing all permits into one, regardless of location.

In addition, the Reserve Bank of Zimbabwe (RBZ) Financial Services Licence for local businesses has been reduced to a flat fee of US$20, down from US$186, while the Procurement Regulatory Authority of Zimbabwe will now issue a single licence across business categories at a cost of between US$50 and US$120, applicable to all branches of a company.

The collective impact of these measures is expected to be profound.

By drastically reducing the upfront and recurring costs of compliance, the Government aims to stimulate entrepreneurship, encourage the formalisation of businesses and free up capital for investment in growth and job creation.

For retailers across Zimbabwe, long burdened by complex and expensive regulations, these reforms represent a long-awaited breath of fresh air.

“These measures are meant to aid in the creation of a conducive economic environment where jobs will be created, productivity improved across all sectors of the economy, achieving high growth rates through improving the ease of doing business,” added Minister Ncube.

“Government remains committed to improving the business environment to encourage domestic and foreign investment in which Zimbabwe can become an upper middle-income society by 2030.”

Optimistic

Zimbabwe National Chamber of Commerce chief executive officer Mr Christopher Mugaga said the reforms would boost confidence and business sustainability.

“We have been pushing for years for this confirmation that regulatory and licensing issues can be reviewed, streamlined and acted upon,” he said.

“Now that this has been achieved, it gives us hope that businesses can resume operations more easily, renew licences and even meet their tax obligations more effectively.”

Continuing the reforms, he added, would likely attract more foreign direct investment.

“What we are seeing now is the start of a serious legislative reform process that will change that. If we continue reviewing the issues that have been killing the economy, I can tell you foreign direct investment will increase. The capacity of businesses to grow will improve and the overall survival rate of companies will rise.”

Confederation of Zimbabwe Retailers president Mr Denford Mutashu said the latest reforms were a fulfilment of President Mnangagwa’s promise to create a more conducive environment for investors and entrepreneurs.

“We commend the leadership of President Mnangagwa for fulfilling most of the promises he made at the beginning of the Second Republic and showing to everyone that he is a listening leader,” he said.

“One of those promises was to build a private sector-led economy, and to achieve that, it was necessary to remove impediments in doing business and align them with the goals of Vision 2030.”

Mr Mutashu said the ongoing reforms demonstrate that the Government is now listening to the concerns of business.

“It will certainly attract both domestic and foreign investment. Businesses will find it easier to comply with regulations, reducing opportunities for corruption and underhand dealings,” he said.

“For example, one who operates a retail and wholesale business under the same establishment will now need only one licence.”

A study commissioned by the Government through the National Competitiveness Commission, which was published under a report titled “Zimbabwe Competitiveness Report 2024”, concluded that excessive regulatory costs, multiple licensing requirements and bureaucratic overlaps were among the most significant impediments to the ease of doing business.

The study concluded that the manufacturing sector’s competitiveness was being hampered by excessive labour costs, high energy prices and a huge tax burden.