Formulate tax policy for SMEs, Govt urged 

Source: Formulate tax policy for SMEs, Govt urged | The Herald 5 NOVEMBER 2018

Ms Mazani

Kudakwashe Mhundwa Business Reporter
Government needs to formulate a tax policy that will enable Small-to-Medium Enterprises (SMEs) meet their obligations and feed into the country’s fiscus, Zimbabwe Revenue Authority Commissioner General Faith Mazani said.

The suggestion comes amid reports that Government has a tax deficit of around $4,5 billion from tax dodgers.

Currently, Zimra is inviting companies that are not tax compliant to take advantage of the “voluntary disclosure” window and regularise their operations on a “no questions asked” basis.

The tax collector said companies and individuals that continue to operate outside the tax net by December 31 will be dealt with.

Speaking at an SMEs Solutions Indaba on Friday, Ms Mazani said there was need for the country to establish a simplified tax structure for small business to comply with tax requirements.

“We are asking the ministry to allow us to have a tax system that is geared or structured to make it easy for small businesses to comply.

“Zimra is currently segmenting businesses and we want to pay particular attention to the needs of the small and medium enterprises and we are sharing these models with the ministry.

“Our purpose for segmenting is to then say can we not have a simplified tax system that is suited to the circumstances of the small businesses.

“When we are dealing with big businesses the authority requires audited accounts as the law stipulates that you have to submit your accounts, but how many of us are able to have an accountant or book keeper to do those records and this is an area to be addressed on a policy position,” she said.

Various players in the small to medium enterprises have since expressed their failure to meet tax obligation placing emphasis on how the current tax policy is unfavourable for their business models.

The Indaba made special appeal to Zimra that newly established firms be allowed tax wavers and holidays.

Zimbabwe has the second largest informal economy as a percentage of its total economy in the world, after Bolivia, the International Monetary Fund said.

In a working paper titled, “Shadow Economies Around the World: What Did We Learn Over the Last 20 Years?” in which 158 economies were studied, Zimbabwe, with a score of 60,6 percent, came second to Bolivia which topped at 62,3 percent.

Government is still trying to come up with effective means to make sure the informal sector, which is undoubtedly now the biggest employer, can contribute to the fiscus through paying taxes.