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SMEs appeal for VAT scrapping


THE Small-to-Medium Enterprises (SMEs) and Co-operative Development ministry has appealed to the government to offer informal
players another moratorium on value-added-tax (VAT) registration in the 2018 budget.


The government issued a six-month moratorium on penalties for non-compliant small and medium-sized enterprises that were eligible for tax registration before January this year.

Following the initiative, about 12 992 SMEs complied with a Zimbabwe Revenue Authority (Zimra) directive for them to register
for tax purposes by June 30.

SMEs ministry permanent-secretary, Evelyn Ndlovu, told delegates at a POSB SMEs development forum in Bulawayo yesterday that many informal players did not take up the offer and the government should provide another moratorium.

“We are appealing to you to come up to us and give us your ideas on how we can simplify the taxation system for you and we have had a lot of seminars throughout the country with Zimra to try and educate you on taxation,” she said.

“At the end of the day, more than 12 000 SMEs came forward to register during the tax waiver or registration process, which was offered in the budget and that budget statement we had to move as a ministry to go and talk to the ministry of Finance to say, look, give these guys a chance.

“Give them an opportunity to register and become taxpayers.”

Ndlovu said they were appealing to the government, through the Finance ministry in the next budget statement, to afford small traders more time.

She said presumptive tax was very expensive and some SMEs did not understand it.

Speaking at the same event, POSB official, Hope Marere said SMEs owned by women were affected by lack of credit lines.

“The gender gap in finance obviously affects female-owned businesses very negatively,” she said.

“Therefore, it is not a surprise that the average growth rate of women’s enterprises is significantly lower than that of SMEs run by men.

“This is not peculiar to Zimbabwe, as evidence indicates this is a global phenomenon.”

Many SMEs view paying tax as an unwanted cost to the business rather than normal practice.

Taxes applicable to SMEs include presumptive, income, VAT, pay as you earn and withholding tax.

There are more than 5,7 million businesses operating in the informal sector.

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