Zimra exorbitant taxes, penalties stifling SMEs: Govt

SMALL-to-Medium Enterprises minister Sithembiso Nyoni has blamed exorbitant taxes and penalties charged by the Zimbabwe Revenue Authority (Zimra) for stifling growth of the sector.



Nyoni made the claims yesterday while presenting oral evidence before the Parliamentary Portfolio Committee on Small to Medium Enterprises.

“Zimra may need to review the penalties they levy even in amnesty era. A case in point is of an SME in Gweru, who voluntarily went to Zimra to regularise his position, he was levied penalties of $87 000. That quarter he could not get his tax clearance to facilitate continuity in business,” Nyoni said.

“It is such behaviour that creates a difficult platform to engage SMEs for formalisation,” she said.

After the closure of large enterprises due to the downturn of the country’s economic fortunes, most people have turned to the informal sector to earn a living, but government wants them to formalise their operations for taxing purposes.

Nyoni told the committee chaired by Gokwe MP Dorothy Mhangami (Zanu PF) that most SMEs were reluctant to formalise their operations due to lack of incentives from government as well as a culture of being informal.

“The liquidity crisis has brought with it high cost of money and short-term lending, thereby the SMEs are not prepared to pay other extra costs that are associated with formalisation. SMEs have been informal for too long and they really need a change in mindset. Even when they are able to register, many are ill-disposed to formalise,” she said.

Turning to housing co-operatives, Nyoni said government had not banned them, but the Ministry of Local Government, Public Works and National Housing has stopped allocating land to the co-operatives until such a time when they deal with allegations of fraud and abuse of the societies by some greedy members.

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  1. Nyoni she is dull!! She advocated for SMEs to regularise, then she cries foul, what did she expect from ZIMRA,Loans!! ZIMRA is mandated to collect revenue and if you register you pay Taxes!!
    Nyoni should be advocating for a threshold to register with ZIMRA whilst fostering growth of the SMEs.Example those whose revenue exceeds 60 000 per annum should register with ZIMRA and the rest are categorised as SMEs and are exempted to register until they start selling over 60 000.

    1. I really cant see the ‘bull’ in what she is saying? Even so called large enterprises are struggling with penalties from Zimra so where is the bull?

  2. You can’t rely on people VOLUNTEERING to pay taxes FFS! That is absurd.No one likes paying taxes period.It should be mandatory for everyone running a business to submit a summary of their earnings to the tax authorities.That ethos should be instilled into every citizen from the cradle to the grave.Excuse the somewhat naff cliché.

  3. The informal sector exist in all countries. There are advantages and disadvantages of formalizing yr business. Not all companies are listed on the Zimbabwe Stock Exchange (ZSE). There are pros and cons of listing a company on ZSE. If the advantages of listing outway the disadvantages then u list and if not u de-list on the exchange. There are costs involved in formalising5 a business which u can avoid if u kept your business informal. Currently businesses are taxed highly in Zimbabwe and that is constraining business growth. In some countries govts give incentives or subsidies for SMEs to grow.

  4. Nyoni yu correct my sister.now yu r working.zimra is killing businesses.The ITF 263 is zimra s weapon.Everyone small,medium,large companies need this tax clearence to conduct business.wthout it no serious business.But for Zimra to penalize all companies regardless is rent seeking.everyone who goes to zimra has penalties.late submisions of nil return penalt .even in soccer theris limits.so Nyoni plse go on ,take on this zimra that is killing yo ministry

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