ZIMBABWE GOVT TO SEGMENT INFORMAL SECTOR

By Victoria Mtomba

GOVERNMENT will next year segment the informal sector into small and medium enterprises as it moves a gear up to formalise the sector.

Speaking on the sidelines of the second consultative forum for SME’s yesterday, director of finance and administration in the Ministry of Small and Medium Enterprises Wellington Goba said government wanted to formalise the informal sector.

“This is a process some will want to remain informal forever. In 2015 we will look at the micro, small, medium enterprise and we will actually be segmenting them,” he said.

Goba said the segmentation would help in training SMEs.

However, he said some of the SMEs were viewing the transition as a government ploy to tax the sector.

In a speech read on her behalf at a meeting in Harare yesterday, SMEs minister Sitembiso Nyoni said the transition from informality to formality could never be achieved without adopting guiding principles such as deployment of resources, internal and external infrastructure development and training.

“It is high time we encouraged honest business among our SMEs, but that will be achievable through building confidence in the system,” Nyoni said.

Goba said all co-operating partners had participated in the consultative meeting.

“We are now looking at people being licensed and working in decent accommodation,” he said.

Zimbabwe has 5,7 million people employed in the informal sector. Almost half of them own businesses in the sector with the remainder being employees.
An estimated $7,5 billion was circulating in the informal sector and the government wants these funds to go into the formal system.

Finance minister Patrick Chinamasa in the 2014 National Budget said the structure of the economy had changed and there was need to formalise the informal sector.

Government has been failing to collect taxes from informal traders as the traders were not structured in the way they do business.

CREDIT SOURCE: http://www.zimbabwesituation.com/news/zimsit-m-govt-to-segment-informal-sector/