THE Zimbabwe Revenue Authority (Zimra) has issued new import regulations that are set to result in the formalisation of Small to Medium Enterprises (SMEs), most of which have remained largely informal despite dominating the economic landscape.
In new regulations issued yesterday under public notice number 31 of 2019, the revenue collector advised that all importers of commercial goods will now be required to apply for and get a Business Partner Number from the taxman.
Before the new regulations, most businesses – especially small scale retailers – were simply paying duty for commercial goods at the country’s ports of entry and authorities were unable to track and possibly tax the goods once they were into the country.
“The Zimbabwe Revenue Authority (Zimra) in this public notice would like to advise that all individuals importing commercial goods into Zimbabwe would be required to apply for Business Partner Number through the Zimra E-Services platform. . .” said Zimra in a statement
“Please note that with effect from 9 September 2019, no individual importing commercial goods, for example goods for resale of a value exceeding $8 000, will be cleared unless they have the Business Partner Number and a valid Tax Clearance Certificate,” reads the notice.
The move is in line with the signal given by Finance and Economic Development Minister, Professor Mthuli Ncube, while addressing industry and commerce executives during a breakfast conference on taxation on the sidelines of this year’s Zimbabwe International Trade Fair (ZITF) in Bulawayo.
Minister Ncube said there was need to widen the tax base as well as include the informal sector and modernising collections.
“We remain committed to current and future tax reforms geared at widening the tax base so that the tax burden is shared by all – including by the informal sector for that matter,” Minister Ncube told captains of industry.
“Going forward, therefore, our policy thrust is to continuously reform our tax system so that taxes are modernised or restructured to broadly capture all economic activity and transactions – including the informal and shadow ones – raise revenue, close the fiscal deficit and restore confidence through low budget deficit and reduced domestic debt,” he said.
The drive to formalise all commercial operations in the country has been ongoing and in January this year it was reported that the number of Small to Medium Enterprises (SMEs) that formalised their operations with Zimra in 2018 had increased to more than 18 500 from about 13 000 in 2017.
In an interview, Bulawayo Chamber of SMEs chairperson Mr Energy Majazi said the improvement on the number of registered SMEs was largely attributed to enforcement by the Zimbabwe Revenue Authority.
In 2017, Cabinet approved the SMEs formalisation strategy paving way for the reinforcement of the social contract and creation of sustainable decent jobs.
The drive to formalise the sector comes on the back of study reports that about $5,7 billion is circulating in that market. However, the formalisation process has been met with resistance by some players who claimed benefits of formalising were outweighed by costs.