Home » Governance » Chinamasa Vows to Unleash Taxman On Informal Traders

FINANCE Minister Patrick Chinamasa has vowed to track down all informal traders to recover what he said were the state’s dues realised through the activities of the often unregulated economic sector.

Responding to questions by backbenchers in Parliament last week, Chinamasa also insisted that even tuck shop owners must present evidence of their cash-flows to Zimra to allow the state to collect its dues.

According to the 2015 budget, tuck shop owners are now supposed to pay a flat $300 quarterly tax.

But MPs last week queried the amount which they said was too much for poor families and pensioners struggling to make ends meet in a tough economy.

“…I do not believe that the presumptive tax as currently charged is too high,” Chinamasa said, while responding to a question by Kadoma Central MP Fani Fanuel Phiri.

“The tax payer has a choice. You can make your books available to show that you are not making money.

“In fact, it may turn out that you are not liable to pay tax, but if you are not prepared to be transparent to show your books, the tax man has a right to presume you to be making an income which you may not be making.”

Asked by Mutasa South MP Irene Zindi how it was possible for groups of women operating makeshift businesses with no track of their dealings to present their books to Zimra, Chinamasa insisted they still carried the burden to convince the tax payer.

“What has happened in our economy is a structural shift from formalised employment to informal sector and that is what has eroded our tax revenue base,” said Chinamasa.

“Therefore,” he added, “we cannot afford not to follow where the money now is, which is in the informal sector.

“What I would say to the hon. member is that if they are already making income, all we want to know is what level of income. There may not be any profit, so we do not tax expenses.

“The tax system has got tax bands and there are thresholds of income which are not liable to taxation. Like I said, you can do your books very simply, very elementary and show the taxman.

“I would want the hon. member to be coming back here to say Zimra is not accepting our books because they are too elementary. That is something that we can look at in order to simplify the kind of information that must be availed to the taxpayer for himher to make an opinion as to whether that income comes within the band of taxable income.”

The cash-strapped government is accused of failing to invent enough ideas to expand the fast-shrinking revenue base while taking the easier option of taxing those eking out a living in the streets.

Government is adamant an estimated $7 billion is currently exchanging hands outside the country’s formal system where the state draws its share through taxes.

Chinamasa insisted in Parliament that there was no turning back in the state’s attempt to force informal traders to meet their obligations.

“…On that one, I think we should all be in agreement and we should not change our position. We should follow the money where it is now which is in the informal sector.”

Source : New Zimbabwe