By Ndafadza Madanha
GOVERMENT is working on a number of measures to support the growth of Small to Medium Enterprises (SMEs) and ensure they contribute to the fiscus.
According to statistics, Zimbabwe has about 3.5 million SMEs operating in various sectors of the economy and most of them face various challenges in the operation of their businesses.
In the 2018 People's Manifesto, ZANU PF undertook to support SMEs so that they quickly transition to productive stages and create decent jobs.
Some of the commitments made by the manifesto include introducing tax reforms, capacitating SMEs banking institutions and reducing the cost of doing business.
Deputy Minister of Finance Cde Clemence Chiduwa says the ZANU PF Government is already implementing promises made in the People’s Manifesto.
Some of the measures include reviewing downwards presumptive tax rates to encourage greater compliance by the SMEs sector.
"Government introduced the presumptive taxes on selected sectors of the economy which include restaurants, bottle stores, hair salons and commuter omnibus operators in order to broaden the tax base. However, despite measures instituted to take income from informal sectors, revenue contribution to the fiscus remains insignificant due to low compliance levels,” Minister Chiduwa said.
“It is important to note that the informal sector largely views taxes as an additional cost to business despite the expectation that Government should provide quality social services. In order to encourage compliance with tax legislation, Government in January, reviewed downwards presumptive tax rates and the payment period from quarterly to monthly basis, thus ensuring affordability."
Further to this Cde Chiduwa says Government has ring-fenced revenue generated from the presumptive taxes to supporting the Small and Medium Enterprise Development Corporation.
"In recognition of inadequate working capital for SMEs, Government ring-fenced revenue generated from presumptive taxes towards capitalisation of the Small and Medium Enterprise development Corporation for own lending to SMEs,” Cde Chiduwa.
“Government will however continue to explore potential compliance enhancing measures with a view to increase the contribution of the informal sector to the fiscus.”