Informal sector eating into Zimra’s revenues; concern over unlicenced foreign tuckshop owners rising

TAKUDZWA HILLARY CHIWANZA

HARARE - The Zimbabwe Revenue Authority (Zimra) has raised concerns about the increasing informalisation of the retail sector. They believe this trend is significantly impacting revenue collection.

Image: Linda Mujuru/Global Press Journalism

Regina Chinamasa, the Zimra commissioner general, voiced these concerns during a meeting with the budget and finance committee. The meeting was held on Tuesday, where she submitted a bid for the 2024 national budget.

Chinamasa highlighted that the retail sector is one of the major contributors to revenue. She pointed out a worrying trend of de-formalisation within the sector. Large retailers are struggling due to the rise of tuckshops, which she believes pose a serious challenge to revenue collection.

On Monday, Sithembiso Nyoni, the Industry and Commerce minister, accused informal retailers of creating a shadow economy by evading taxes. Nyoni had visited wholesalers and tuckshops in downtown Harare.

She was surprised to find that all prices were exclusively in the greenback. She also noted that a majority of these businesses were run by foreign nationals without proper documentation, even though this sector is reserved for locals.

The reserved sectors include transport services such as passenger buses, taxis, and car hire services.

It also includes retailing, wholesaling, hair salons, advertising agencies, estate agencies, grain milling, bakeries, tobacco grading and packaging, and artisanal mining.

Meanwhile, the government has issued a directive for foreign nationals involved in retail trade to obtain the necessary documentation to operate businesses in the country.

It has come to light that some foreigners, who run small retail shops known as tuckshops in Harare’s downtown area, lack the required shop licenses. Some of these individuals are also reported to be escapees from refugee camps.

During Nyoni’s tour of tuckshops, it was revealed that nationals from the Democratic Republic of Congo (DRC), Pakistan, and Nigeria are dominating a sector that is primarily reserved for Zimbabweans. Most of these foreign nationals were found to be operating without the necessary licenses.

Nyoni visited one shop run by a Congolese national who lacked the proper documentation to operate a business and was supposed to be residing in a refugee camp.

The Minister clarified that the government does not intend to expel foreigners from Zimbabwe but emphasized the need for them to foster a conducive working environment.

“Retail is a sector reserved for Zimbabweans, but we are not excluding foreigners,” Nyoni stated. She explained that foreign nationals have a certain trading threshold and violating this threshold would be considered breaking Zimbabwean laws.

Nyoni further added, “We do not intend to chase anyone away. I am merely implementing the laws I am responsible for. Therefore, ensure you possess the necessary documentation to operate a business in Zimbabwe.”

During the tour, it was also noted that most tuckshops were violating the Trade Act by placing food items on the floor instead of on shelves as stipulated by law.

In response to these developments, Chamunorwa Mukova, a representative of the Tuckshops Association, expressed their desire for the Harare City Council and the Zimbabwe Revenue Authority (ZIMRA) to reduce their charges.