Chronicle Editor
Nokuthaba Brita Ncube, [email protected]
IN a bid to enhance tax compliance among Micro, Small, and Medium Enterprises (MSMEs), the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, has proposed extending the Virtual Fiscalisation System for recording Value Added Tax (VAT) taxable transactions to MSMEs.
MSMEs currently account for about 86 percent of overall economic activity.
Zimbabwe’s informal economy has grown rapidly over the years, spanning diverse economic sectors as locals find innovative ways to fend for themselves.
This growth has led to the emergence of numerous informal businesses that operate outside formal tax systems and do not fulfil their tax obligations.
A few formalised businesses carry the tax burden for non-compliant businesses, leading to higher production costs and reduced competitiveness of local products.
Fiscalisation, according to Zimra, refers to configuring fiscal devices to enable them to record sales and other tax information on the read-only fiscal memory (fiscal devices) at the time of sale for use by the tax authority in VAT administration (Statutory Instrument 104 of 2010).
The proposed initiative will be effective in the first quarter of 2025.
“I propose to extend the Virtual Fiscalisation System for the recording of VAT taxable transactions to Micro and Small Enterprises whose turnover falls below the VAT registration threshold for purposes of monitoring sales, during the first quarter of 2025,” Prof Ncube stated in his national budget statement last month.
This will assist in promoting transparency and ultimately enhance tax compliance among Micro and Small Enterprises.
In September last year, Zimra also introduced QR codes, allowing taxpayers to scan and validate transactions.
Several businesses were using cash registers, which became outdated due to this new requirement.
In the 2024 Budget Strategy Paper, Prof Ncube said achieving the target revenue collections was underpinned by tax administration initiatives that enhance enforcement and tax compliance, particularly of business processes and the adoption of new technology.
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