GOVERNMENT is working on a comprehensive process to fine-tune and establish measures to tame wanton price increases, which include strict tracking of supply and distribution of basic commodities, increasing bureau de change centres and regularising informal traders to curb irregular activities.
This comes after the Ministry of Industry and Commerce recently conducted a baseline survey on prices of basic commodities following pronouncement of Statutory Instrument 142 of 2019 which jettisoned the multi-currency system in favour of the local currency.
The survey conducted in Harare unearthed details on informal retailers, popularly known as tuck-shops, which were found to be engaging in illicit activities that upset the market.
Findings of the report, exclusively in possession of The Sunday Mail, reveal that some of the tuck-shops are suspected to be “foreign currency spinning ventures masquerading as retailers”.
While authorities are crafting the next step, after the findings, the Confederation of Zimbabwe Retailers (CZR) has proposed drastic action including clamping down on errant traders.
The ministry noted that following pronouncement of Statutory Instrument 142, prices of some goods and services had gone down, but activities by informal traders needed to be curtailed to manage price distortions bedevilling the economy.
In the report, the Ministry of Industry and Commerce recommended more deterrent measures against black market dealings.
“There is need to come up with a supply chain tracking mechanism as most of the products are suspected to be diverted to the informal retail sector for quick gains,” read the report in part.
“This arrangement seems to be supportive of black market activities in both the retail and the informal currency markets. Black market foreign currency traders were still on the streets although they are now trading with caution as they were aware that security agents had been deployed by Government.
“Efforts by Government to eradicate such activities need more intensification and deterrent fines for perpetrators.”
The Ministry of Industry and Commerce suggested that, “a holistic approach is required towards regularising the informal retail sector.”
Furthermore, the Ministry recommended tracking supply of products from manufacturers to the last consumer.
“Government needs to deliberately encourage the setting up of bureau de changes at areas like Roadport”, adding that its departments should “work more closely in curbing parallel market activities both in retail and currency market.”
The survey by the Ministry of Industry and Commerce showed that in some instances, tuck-shops were better stocked than wholesalers with consumers at times even preferring the former.
Asked on what control mechanisms were in place to monitor activities of shops which demand cash, Zimbabwe Revenue Authority (ZIMRA) head of corporate communications Mr Francis Chimanda said: “Zimra has audit trail mechanisms to follow such cash high volume transactions even from the manufactured stocks.
“When they purchase these stocks, a Tax Clearance Certificate is required. In addition, Zimra can use a cash related formula to ascertain the income and expenditure of individuals in trade. Where cash upfront is used Zimra adopts an industry bench mark and tax those under declaring.”
Mr Chimanda said the tax collector would also track supply of products from the manufacturer.
“Zimra, like before, will do an industry benchmark. It must also be noted there is no business without records. Diverting goods achieves a sale. Manufacturers have records and will certainly account for such revenues. Where this is not done, stock reconciliation will be undertaken.
Mr Chimanda said Zimra would continue carrying out door to door visits to business premises to ensure they are tax compliant.
Confederation of Zimbabwe Retailers President Mr Denford Mutashu urged authorities to clampdown on the tuck-shops.
“There are serious illicit activities taking place there (at the tuck-shops) and the end result is that these activities undermine Government’s efforts to reform the economy and the overall policy to see prices going down,” he said.
“These shops accept cash-only payments for the purpose of trading it on the parallel market. In essence they are fronting the parallel market.
“My suggestion is that, let us cordon-off the downtown area and deploy all our law enforcement authorities, including the police, the council and Zimra to assess the level of compliance by these shops.
“Such drastic action is necessary because the level of indiscipline by these shops is unacceptable.”