Zimra exorbitant taxes, penalties stifling SMEs: Govt

via Zimra exorbitant taxes, penalties stifling SMEs: Govt – NewsDay Zimbabwe March 14, 2016

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.

by XOLISANI NCUBE

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.