BULAWAYO — Under-pressure Finance and Economic Development Minister, Patrick Chinamasa, says government is desperate to force the country’s informal sector to pay tax, as revenues continue to shrink due to a worsening economy.
Chinamasa, who was speaking during a 2017 pre-budget seminar last week, said the economy had become so informalised that it was now difficult to collect tax.
“We need a lot of discussions; we are going to have a meeting with Minister (of Small and Medium Scale Enterprises, Sithembiso) Nyoni to try to understand this sector and try to see how we can collect revenue,” said Chinamasa.
He said he had consulted his counterparts in Rwanda and Ethiopia which have done well in collecting revenue from the informal sector.
“I have already sent a delegation of officials to go and see what the Ethiopians do. We need to understand how they are doing it and learn from their experiences,” he said.
Chinamasa said with the international community not keen on giving budgetary support to Zimbabwe, the country has to innovate around local sources to fund government expenditure. He said it was important for both companies and individuals to cultivate a culture of tax payment.
The Zimbabwe Revenue Authority (ZIMRA) announced recently that it would come up with more revenue collection strategies next year.
ZIMRA missed its revenue collection target by six percent in the six months to June 30, 2016.
Chinamasa said Zimbabwe was not operating in a normal economy and so it was incumbent upon everyone to work hard in raising resources to fund the 2017 National Budget.
“You do not need the International Monetary Fund to tell you that if you are earning US$100 and you are spending US$97 of it on wages, you are not going anywhere. It is very important that we embrace our reforms. In order to embrace our reforms, we have to be frank with each other as to our situation,” said Chinamasa.
Over the past years more than 80 percent of the budget has been going towards the payment of civil servants’ salaries at the expense of capital expenditure, thereby stifling economic growth.
Minister of Small and Medium Scale Enterprises, Sithembiso Nyoni
He said economic growth would be underpinned by agriculture which is expected to contribute 40,4 percent to the gross domestic product on the back of good rains anticipated this year.
“But I remain open to a revision of those targets between now and the presentation of the budget. Let’s remain focused. We know what our challenges are; we know what is to be done,” he added.
Speaker of the National Assembly, Jacob Mudenda, challenged legislators to come up with proposals to boost productivity and increase the contribution of the informal sector to the mainstream economy.
He said the august House remained concerned with the non-implementation of audit findings and recommendations by the Public Accounts Committee (PAC).
“The audit reports have revealed rampant abuse of public resources by various government departments and yet still very little has been done to rectify this economic cancer,” said Mudenda.
“I strongly believe that failure to implement these recommendations renders the work of the PAC and Parliament as a whole purely academic.”-Fingaz
