The
formal
retail
sector
continues
to
face
major
challenges,
including
high
inflation,
foreign
currency
shortages,
and
growing
competition
from
informal
traders.
In
an
interview
with NewsDay this
week,
Zimbabwe
National
Chamber
of
Commerce
(ZNCC)
president
Tapiwa
Karoro
said
that
the
5%
withholding
tax
on
non-registered
micro,
small,
and
medium
enterprises
(MSMEs)
has
discouraged
informal
traders
from
engaging
with
formal
wholesalers,
leading
many
transactions
to
move
further
underground.
Said
Karoro:
This
has
resulted
in
low
tax
compliance,
reduced
productivity,
constrained
investment
and
limited
access
to
social
security
benefits.While
the
5%
withholding
tax
on
non-registered
MSMEs
[micro,
small
and
medium
enterprises]
measure
seeks
to
enforce
tax
compliance,
it
has
inadvertently
discouraged
informal
traders
from
engaging
with
formal
wholesalers,
thereby
pushing
more
transactions
underground.
Karoro
has
urged
the
government
to
introduce
a
graduated
tax
structure
with
lower
initial
rates
to
encourage
voluntary
registration
among
businesses.
He
asserted
that
formalising
the
economy
is
vital
for
sustainable
economic
growth,
increased
tax
revenue,
improved
business
productivity,
and
greater
investor
confidence.
He
further
stressed
that
a
combination
of
incentives,
regulatory
reforms,
enforcement
mechanisms,
and
digital
transformation
would
be
key
to
fostering
a
balanced
and
inclusive
economic
environment.
Meanwhile,
the
Consumer
Council
of
Zimbabwe
(CCZ)
has
expressed
concern
over
the
ongoing
closure
of
formal
retailers.
In
a
statement
this
week,
the
CCZ
cited
unfair
competition
from
informal
traders
as
a
factor
factor
driving
this
trend.
The
council
also
voiced
its
worries
about
the
continued
shutdown
of
formal
retailers
and
wholesalers.