Staff Reporter
The Treasury has announced a reduction in presumptive tax on salons and barber shops from US$30 to US$10 per chair, following persistent calls from Members of Parliament (MPs) to ease the financial burden on small businesses. The new tax measures will also extend to beauty parlours, fitness centres, and butcheries as the Government seeks to broaden its tax base amid economic challenges.
In a statement, Finance and Economic Development and Investment Promotion Minister, Professor Mthuli Ncube highlighted that the decision aims to support small businesses struggling under the weight of high taxes.
“This move is intended to provide relief to operators in the informal sector, particularly salons and barber shops, which have been facing challenges due to the high presumptive tax rate. We have listened to the concerns raised by MPs and stakeholders, and this reduction is a step towards creating a more favorable business environment,” Ncube said.
The extension of the presumptive tax to beauty parlours, fitness centres, and butcheries signals the Government’s efforts to bring more informal businesses into the tax net.
“This approach will help improve revenue collection without placing undue pressure on smaller enterprises,” Professor Ncube reiterated
The Minister also addressed the ongoing foreign currency challenges affecting the country, particularly in the fuel sector.
“We understand the difficulties posed by the foreign exchange market, and we will maintain the sale of fuel in foreign currency to ensure stability in the supply chain. This is a necessary measure to mitigate the impact of forex shortages on fuel availability,” he explained.
The Treasury’s new measures are expected to ease the financial strain on small business owners while maintaining essential foreign currency operations in critical sectors.
However, analysts warn that the extension of taxes to additional businesses might require a balanced approach to avoid overburdening the growing informal sector.
Economic analyst Tapiwa Nyatsanza welcomed the reduction in presumptive tax but cautioned that expanding the tax base must be handled carefully.
“Lowering the tax on salons and barber shops is commendable, but the Government must ensure that newly taxed businesses are not stifled. A delicate balance is needed to promote growth while maintaining revenue targets,” Nyatsanza said.
The adjustments in tax policy reflect the Government’s broader strategy to stimulate economic activity while addressing the persistent forex shortages that continue to challenge the country’s financial landscape.
