The move aims to regulate the thriving informal sector, particularly micro-businesses such as chicken and egg producers, and increase government tax revenue.
Ncube outlined that unregistered businesses in the informal sector might face exclusion from the supply chain, with only licensed and tax-compliant operators eligible to procure goods from manufacturers and wholesalers.
The latest policy shift aims to formalise the operations of small businesses and ensure compliance with taxation requirements.
“In order to restore the supply chain from the manufacturer, wholesaler to retailer, I propose that only licensed and Tax Compliant Operators procure goods from manufacturers and wholesalers.
“In addition, I therefore propose that only traders registered for VAT purposes and in possession of valid Tax Clearance Certificates be eligible to procure goods from manufacturers,” stated minister Ncube.
While the move is intended to bring about greater tax compliance and revenue generation for the government, it has faced criticism for potentially burdening small businesses.
Zimbabwe’s latest tax policy criticised
Critics argue that the Zimbabwean government’s taxation policies, including proposed increases in passport application fees and toll gate fees, disproportionately affect the economically vulnerable.
Moreover, a wealth tax has been proposed, set at 1 percent of the market values of residential properties with a minimum value of US$100,000.
The wealth tax is part of the government’s efforts to address economic challenges, but concerns have been raised about its potential impact on property owners.
Zimbabwe has struggled to attract significant foreign investment in recent years, with critics questioning the transparency and benefits of deals struck with countries like Belarus, China, and Russia.
The government’s efforts to revitalise the economy have faced scepticism, and the proposed tax measures are seen as a means to address fiscal challenges.
The country’s economic woes have persisted, and the government is seeking ways to shore up revenue to fund essential services and infrastructure development.
However, the impact of these measures on small businesses and ordinary citizens remains a subject of ongoing debate and scrutiny.