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ZIMRA Implements Measures to Formalize Informal Sector and Ensure Tax Compliance

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The Zimbabwe Revenue Authority (ZIMRA) has begun the implementation of measures outlined in the national budget, aiming to encourage vast segments of the informal sector to register for tax purposes. These efforts extend to individuals and businesses not generating sufficient income to be taxable. The measures also include regulations restricting manufacturers and wholesalers from selling certain goods to those who are not tax-compliant.

In a statement, ZIMRA emphasized its commitment to enhancing value chain integrity and transparency while countering unfair competition within the informal sector. The focal point of these initiatives is to prompt informal traders to register with ZIMRA through the mytaxselfservice.zimra.co.zw platform and achieve tax compliance.

According to the guidelines outlined in Finance (No. 2) Act 13 of 2023, Zimbabwe’s Minister of Finance, Economic Development, and Investment Promotion, Mthuli Ncube, introduced measures specifying tax payment requirements for manufacturers, wholesalers, retailers, informal traders, and individuals.

Wholesalers are mandated to possess a wholesale license, be registered for Value Added Tax (VAT), and hold a valid tax clearance certificate. Wholesalers lacking VAT registration and a current tax clearance certificate are now prohibited from purchasing goods directly from manufacturers, irrespective of the value.

The notice further outlines that retailers must possess a retail license, be VAT registered, and maintain a current tax clearance certificate. However, retailers face no limitations regarding the value of goods they can purchase from compliant wholesalers.

For retailers not registered for VAT, informal traders, and individuals, purchasing goods from wholesalers exceeding US$1,000 or the equivalent in the local currency at the auction rate is restricted. Such purchases from the same wholesaler should not exceed US$1,000 within a minimum period of 30 days. In cases of initial purchases or the inability to provide proof of prior transactions, individuals are limited to acquiring goods not exceeding US$20.

These measures, designed to enhance tax compliance within the informal sector, are anticipated to bring transparency to economic activities and contribute to the broader fiscal stability of Zimbabwe.

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