Staff Reporter
In a new initiative aimed at enhancing Value Added Tax (VAT) compliance within the informal retail sector, the Zimbabwe Revenue Authority (ZIMRA) has addressed VAT compliance issues among downtown tuckshop owners in Harare.
A source who spoke to this publication disclosed that this strategic move seeks to thwart the collection of bribes by city council officials and to put order in the city by engaging tuckshop proprietors operating in downtown Harare. The initiative further seeks to develop a comprehensive roadmap aimed at fostering greater VAT compliance within the small retail sector.
“By bringing together regulatory authorities and local stakeholders, the initiative aims to streamline tax compliance processes and promote transparency within Harare's bustling retail landscape,” said the source.
The source added that ZIMRA has pledged to streamline the VAT registration process for tuckshop owners by overlooking certain requirements, such as lease agreements and previous trading records.
“This leniency is intended to incentivize all small retail owners to register for VAT. Tuckshop owners have been given until the end of February to regularise their VAT status,” added the source.
According to the source, the one-month registration period began on 1 February, 2024.
The same source revealed that to facilitate the registration process, tuckshop owners are required to submit a letter containing their full names and business operating addresses.
“These details will assist ZIMRA in conducting thorough investigations as part of their compliance efforts. The submission of names is coordinated through the Confederation of the Zimbabwe Retailers Association, through its president, Denford Mutashu,” said the source.
The source claimed that as of 7 February , 2024, only 87 out of an estimated 300 tuckshop owners had submitted their names for VAT registration.
According to the source, the initiative to make all tuckshop owners VAT compliant aligns with the requirements stipulated in the Finance Act 13/2023, supplemented by recent changes proposed by the Treasury on 8 January, 2024.
“These changes dictate that wholesalers and manufacturers can only sell to VAT-compliant traders. Non-compliant traders will face a 5 percent withholding tax," added the source.
Commenting on this move, political commentator Enos Madziya commended ZIMRA's efforts to regularise tax payments among small retail owners, stating, "This initiative by ZIMRA is a positive step towards ensuring tax compliance among tuckshop owners. It is crucial for all businesses, regardless of size, to contribute their fair share to national revenue and to support essential public services and infrastructure development."
Meanwhile, tax evasion not only deprives the Government of much-needed revenue but also hampers economic growth. Government has been making strides to restore sanity in the downtown area. It has been demanding proper documentation from foreigners running the tuckshops after discovering that some of these foreign traders were supposed to be living in refugee camps.
