Create An Environment That Enables The Informal Sector To Thrive & Formalise Their Businesses - Eddie Cross

While speaking at an online conference on the role of taxation to economic development during the pandemic attended by economists, economist and member of the RBZ’s Monetary Policy Committee (MPC) Eddie Cross said the government could encourage the informal sector to regularise their operations by giving them tax incentives, The Sunday Mail reports.

Said the former MDC stalwart:

The transactional tax will still bring in more revenue than the two tax heads combined. We need an environment that enables the informal sector to thrive and formalise their businesses. Right now they do not want to formalise because they do not want to pay taxes.

At the same conference, CZI’s Denford Mutashu echoed Cross’ sentiments and asked for some tax holidays from the government and said:

Take, for example, City of Harare recently increased shop licensing fees and this goes down to the ordinary consumer, yet there isn’t much to show for it in terms of service delivery.While there are increases in the taxes, let us see what is being done with what is collected.

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We expect some tax holidays although Government needs to play a balancing act to ensure adequate revenue to fund projects. There are some bottlenecks that should be removed. For instance, if you charge USD you should pay taxes in USD, but there is no mechanism to capture that effectively at the moment.

The government recently announced that the taxable income bracket moved from $2000 to $5000.

More: The Sunday Mail