Organise informal sector before collecting tax: Govt urged

Organise informal sector before collecting tax: Govt urged

By on Sep 13, 2016 in News |

GOVERNMENT must organise the informal sector first before collecting taxes, Poverty Reduction Forum Trust (PRFT) chairperson, Godfrey Kanyenze has said.

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Speaking at the PRFT meeting yesterday, Kanyenze said in most countries, including Zimbabwe, policies that were put in place improved conditions of the formal and not the informal sector.

He said the country has 68% of its population living on less than $1,25 per day, yet the government does not focus on the welfare of the poor.

Kanyenze said some people in the informal sector were not making much, as they were not organised.

“Taxing the informal sector is the wrong way of doing it. You first need to see the benefits of being formal,” he said.

Zimbabwe has an estimated 5,7 million people in the informal sector, but they do not contribute meaningfully, as they are not structured or organised.
Government has plans to tax the informal sector to increase revenue flows to the fiscus.

Kanyenze said in most cases, the informal sector start and exit business easily because they just do any business and in some instances people flood the market and there won’t be any customers.

He said there was need for financial intelligence for the communal sector and the informal sector.

Kanyenze said in Africa, many countries recorded growth rates, but this did not translate into job creation.

“In our economies, the majority of the people do not constitute any demand. People have nothing in their wallets and they cannot survive,” he said.

Kanyenze said the country was so vastly polarised and not development-oriented, as in most cases, one was asked which political party or faction they were aligned to.

He said there was lack of social cohesion, which is a key component to development

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