- The 2024 budget statement has raised concerns about the survival of informal traders due to the projected El Niño-induced drought in the region.
- One of the issues is the proposed reduction in the revenue threshold for VAT registration and the banning of direct trading between manufacturers and unregistered traders.
- Zimbabwe has a highly informal market, with over 80% of economic activities happening in that sector.
- The Zimbabwe Revenue Authority has been mainly taxing formal market players, leading to subdued financial performance.
- The government has made efforts to enforce regulatory compliance on informal traders in the 2024 budget, including a VAT standard rate of 15%.
- Most traders in the informal sector prefer to use US dollars instead of the Zimbabwe dollar to avoid exchange losses.
- Informal traders pay suppliers in US dollars, which has led to more suppliers favoring them over formal retailers.
- Informal traders did not account for VAT in their final prices, making their products more competitive.
- The introduction of new measures in the budget aims to maximize tax revenue for the government.
Source: newsday.co.zw
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
