President Emmerson Mnangagwa and his cabinet ministers endorsed Finance Minister Mthuli Ncube’s new measures on Tuesday, which include the introduction of a compulsory tax payment system to ensure all eligible taxpayers contribute.
Mnangagwa addressed the first Cabinet session of 2025 at the State House in Harare.
During the meeting, the Cabinet agreed that all vendors must be promptly issued Point of Sale (POS) machines and, as a result, must open bank accounts upon registration or licensing.
Cabinet also approved changes to the Foreign Exchange Management system, reducing the foreign currency retention level for exporters from 75% to 70%. A summary of the Cabinet minutes outlines these resolutions:
<blockquote>
Cabinet considered and approved Measures to Address Challenges in the Formal Business Environment, which were presented by the Minister of Finance, Economic Development and Investment Promotion, Honourable Professor Mthuli Ncube.
Following the presentation of the Monetary Policy Statement by the Reserve Bank of Zimbabwe on 6 February 2025, Cabinet observed a number of factors that are negatively impacting on the economy and has therefore introduced a cocktail of short and long-term interventions aimed at addressing challenges in the economy and providing support to Micro, Small and Medium Enterprises.
In broad terms, the Government seeks to bring all businesses into the tax bracket and enhance the effectiveness of the foreign exchange market. 
In the long-term, Government will address the business environment in order to streamline fees, charges and minimise duplication of work by Government Agencies as well as improve electricity supply. Such an environment will enable MSMEs to graduate into formal businesses. 
Under short-term measures, the use of electronic money will now be compulsory for all businesses and shall be achieved through the following: 
i. introduction of a compulsory tax payment system to ensure that every eligible taxpayer pays tax;
ii. establishment of a Domestic Inter-agency Team to ensure informal sector compliance with tax laws; and introduction of a framework which ensures that all vendor licencing by local authorities is done in consultation with Central Government.
It will henceforth be mandatory that all vendors are promptly issued with Point of Sale (POS) machines and that they open bank accounts upon registration/licencing.
Cabinet further endorsed refinement of the Foreign Exchange Management system; the reduction of the foreign currency retention level for exporters from 75% to 70%; a reduction in bank charges; and minimum Deposit Interest Rates. 
Cabinet has further adopted the following medium-term measures: 
i. to ease the Cost of Doing Business by streamlining processes, fees and charges, as well as duplication of work by Government Agencies to reduce the turnaround and cost to business;
ii. to ensure strict compliance with the Indigenisation and Empowerment Act which provides for certain areas as reserved sectors;
iii. to enforce the procurement of goods and services from local producers and suppliers in order to support local industry;
iv. to expedite the construction of power plants and upgrading of the distribution network to enhance the availability of electricity; and 
v. to incentivise the use of alternative sources of energy and expedite social protection coverage to the informal sector.
</blockquote>

Pindula News

Zimbabwe now says all businesses must accept electronic payments. This means people can use cards and phones to pay. The president and his team agreed on this new rule. They also want all vendors to have machines to accept electronic payments. The government is making changes to help small businesses grow. They want to make sure everyone pays their taxes. They also want to help local businesses by buying from them. The government is trying to make the economy better for everyone.

All Businesses In Zimbabwe Now Required To Accept Electronic Payments

The Bulawayo Chamber of Small and Medium Enterprises (SMEs) has commended the City of Bulawayo for giving an ultimatum to illegal vendors to vacate the streets, saying trading is a way to make a living but it needs to be done in an orderly manner.
This comes after the Bulawayo Town Clerk issued a statement advising illegal informal traders to move to designated sites no later than Friday, 9 February 2024.
Dube warned that “the full force of the law will be implemented against those who continue to breach the relevant bylaws both immediately, after the deadline and going forward .”
As reported by the <a href="https://www.chronicle.co.zw/bulawayo-chamber-of-smes-applauds-city-councils-move-to-restore-order-and-remove-illegal-vendors/">Chronicle</a>, Bulawayo Chamber of SMEs coordinator Nketa Mangoye Dlamini said the Urban Councils Act mandate the council to govern all economic and social activities in the city including CBD, residential areas, all economic zones and other activities. Said Dlamini:
<blockquote>
The ultimatum to say let’s restore order is important as it follows the law. If you look around, what’s happening now in Bulawayo, there is chaos, we want SMEs to prosper and we want development in the country and we want SMEs to start up and grow but all these things have to be done in a well-planned orderly manner.
When you look at the streets that are currently occupied by illegal vendors, both pedestrians and vehicles can hardly move because streets and pavements are jammed.
</blockquote>
He expressed concern over the lack of ablution facilities, which becomes a health threat with the growing concern about the cholera outbreak. Added Dlamini:
<blockquote>
There is a need to restore order and sanity in the city, Bulawayo is no longer as clean as it was, we cannot have a situation where everyone does as he or she pleases but when things turn bad fingers are pointed at the city council, that is not proper.
Bulawayo Chamber of SMEs promotes the formalisation of businesses. We encourage them to formalise and we train them and encourage them to follow business ethics and to occupy spaces as given by authorities.
</blockquote>
Meanwhile, the City of Bulawayo has advised residents that the transporting of commuters from Egodini shall begin on Monday 5th February 2024.
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/GFV00pVXcAAEO-j?format=jpg&amp;name=large"/><img alt="Image" decoding="async" src="https://pbs.twimg.com/media/GFV00paWkAAsD_h?format=jpg&amp;name=large"/>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Bulawayo Chamber Of SMEs Commends Council's Move To Remove Street Vendors

Players in the small and medium enterprises (SMEs) sector have bemoaned the recently introduced government measures meant to formalise the informal sector saying they will push them out of business.
Over the years, Zimbabwe’s informal sector has grown to contribute an estimated 70% of economic activity but the growth has not translated to significant fiscal revenue thereby pushing the government to introduce measures to ensure compliance.
SMEs with US$25 000 yearly income are now required to register for value-added tax (VAT).
Formal businesses are now restricted from doing business with informal traders without VAT licences.
Small and Medium Enterprises Association of Zimbabwe executive director, Farai Mutambanengwe said the tax regime “criminalised” most of the informal sector.
He made the remarks at the Unpacking the Finance Act seminar held last Friday hosted by the Women Affairs, Community, Small and Medium Enterprises Development Ministry. Said Mutambanengwe (via NewsDay):
<blockquote>
It looks like this tax regime is criminalising most of the informal sector. It’s not the issue of us not wanting to pay but the tax regime is quite radical.
The thing is if you look at the people selling on the streets, how are they going to pay those taxes? The city council will only have a lot of people to run after. This system will push the SMEs into non-compliance.
The policies that you are also implementing, are continuously increasing the number of taxations and they are going to facilitate the shunning of tax payments continuously.
We, as MSMEs, are trying to grow but these taxes are choking businesses. We are going to sink rather than grow to develop the economy.
The tax regime was supposed to be gradually implemented to avoid choking the sector.
The approach of the tax system should be gradual. The taxation system should be simplified so that they can understand.
The taxes are quite complicated, and we need to understand where they are coming from.
As SMEs, we are just trying to make a living and we try to formalise our businesses as well. We want to comply, but some of these taxes are unreasonable.
Some of these entrepreneurs do not even know the benefits of being formal. They need to be educated.
</blockquote>
According to the 2022 Labour Force Survey published by the Zimbabwe National Statistics Agency (ZIMSTAT), over 2.8 million Zimbabweans derived their living from the informal sector compared to 495 000 in formal employment.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

New Taxes Will Drive Us Out Of Business - SMEs

Vendors in Bulawayo have urged insurance companies to come up with insurance schemes that also cater for SMEs.
Bulawayo Vendors and Traders Association (BVTA) executive director Michael Ndiweni told <a href="https://newsday.co.zw/southerneye/local-news/article/200007290/vendors-appeal-for-insurance-scheme">Southern Eye</a> that their members often lose everything in the event of a fire outbreak because their goods are not insured. Said Ndiweni:
<blockquote>
Insurance is very important for small to medium enterprises (SMEs) in the event of accidents like what happened in Espamprekini in Mpopoma where people lost everything (to a fire outbreak) because their goods were not insured.
We are doing advocacy for SMEs to be granted insurance packages. We have also raised this issue to the government during budget consultations for 2023.
We also engaged the government on policy because it should come from government policy for it to be responsive to the traders.
</blockquote>
Ndiweni said property owners should be compelled to insure their goods so that their tenants do the same.

Vendors Appeal For Insurance Packages For SMEs

The business community in Harare has expressed unhappiness over the shop licences fee hike by the Harare City Council.
A number of small to medium enterprise businesspersons have signed a petition against the increase. Part of the petition reads:
<blockquote>
As the business community of Harare guided by the Urban Councils Act (Chapter 29:15), we feel obliged to be consulted on issues of city budgets.
We are guided by Section 86 of the Constitution of Zimbabwe, which gives us the right to have access to information with regards to our operations.
Currently, we are experiencing deflation as per the Minister of Finance and Economic Development’s economic outlook for 2022.
The Reserve Bank of Zimbabwe auction rate has remained the same for the last three months.
</blockquote>
One businesswoman operating hair salons in the capital told H-Metro that her licence fee had gone up from US$400 to US$640.
She said the “unjustified charges” may force small businesses to close shop. Another shop owner said:
<blockquote>
It’s an unjustified increase. They want to force all licence holders into vending where corruption is rampant; this is not good at all.
</blockquote>
A significant number of shops in Harare’s Central Business District are reportedly operating without licences and some city officials are allegedly taking bribes not to shut them down. | <a href="https://www.hmetro.co.zw/businesses-challenge-licence-fee-hike/">H-Metro</a>

Businesses In Harare Challenge Licence Fee Hike

Speaker of the National Assembly, Jacob Mudenda, says the government should urgently modernise the taxation systems and also formalise the informal sector for accelerated economic transformation.
The World Bank estimates that Zimbabwe’s informal sector dominates 60 percent of the economy but the Vendors Initiative for Social and Economic Transformation (VISET) puts the figure at 92%.
Speaking at the 2023 Pre-budget seminar last Friday running under the theme “Leveraging on domestic resource mobilisation to accelerate Economic Transformation”, Mudenda said:
<blockquote>
Domestic resource mobilisation can be achieved if we spruce up our taxation regime through a sustainable digital taxation system.
This will ensure the maximisation of revenue collection thereby guaranteeing optimum resource mobilization through the taxation avenue.
Treasury should invest expeditiously in this area. In tandem, the formalization of the informal economic sector is long overdue.
Let us learn from Bolivia, Bangladesh, and Iran how these countries have exponentially formalized their informal economic sector.
At the moment, 60% of our economy is in the informal sector. If and when we formalize it, we are likely to increase the tax base and in so doing enhance our domestic resource mobilization for accelerated economic transformation.
</blockquote>
In 2015, and then again in 2021, the government held discussions to develop a formalisation policy for Small to Medium Enterprises (SMEs) but nothing has been done to date. | <a href="https://openparly.com/expedite-formalization-of-the-informal-sector-gvt-told/">Open Parly</a>

Mudenda Urges Govt To Expedite Formalisation Of Informal Sector

ZBC News reports that the Zimbabwe Revenue Authority (ZIMRA) will soon be incorporating the small to medium enterprises sector into the tax collection system in line with efforts to broaden the revenue collection base.
ZIMRA Executive Assistant to the Commissioner General Mr john Chakasikwa told journalists attending a one-week media training workshop in Vumba that the SMEs sector will also form the basis for broadening the revenue generation base.
He also challenged journalists to expose smuggling activities, tax evasion and smuggling at border posts.
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More: <a href="http://www.zbc.co.zw/smes-sector-to-be-taxed-zimra/" rel="noopener" target="_blank">ZBC News</a>

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