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The majority of those in the informal sector are involved in survivalist ventures with evidence showing that 40 percent of them earn less than US$200 per month while 11 percent do not have a monthly income.

STUNG by the sharp decline in revenue mobilised to fight HIV and Aids programmes, government is mulling widening the collection of the Aids Levy to cover the tricky informal sector.

Introduced in 1999 as part of government’s response to fighting the HIV and Aids pandemic, the levy became effective in January 2000.

Currently, it is only open to formal employers and their employees who contribute three percent of their income.

For more than a decade now, social and economic upheavals in Zimbabwe have led to calamitous closure of companies and widespread unemployment.

This has greatly weakened government’s ability to provide social nets to those who are increasingly finding it difficult to keep body and soul together, especially victims of the HIV and Aids scourge.

Through the National Aids Council (NAC), government is now weighing the efficacy of collecting Aids Levy from the informal sector to keep its HIV and Aids programmes alive.

NAC owes its existence to an Act of Parliament of 1999.

Its mandate is to coordinate and facilitate the national multi-sectoral response to HIV and Aids.

It is mandated to administer the National Aids Trust Fund collected through the Aids Levy.

Informal sector to pay Aids Levy

The Financial Gazette can report that NAC and the United Nations Children’s Fund (UNICEF) have funded a study to look into whether Zimbabwe has the capacity to collect Aids levy beyond the formal sector.

The study by the New Dimension Consulting has revealed that while the informal sector appreciates the importance of the Aids Levy, it admonishes the lack of transparency around its administration.

What also emerged from the research are questions over whether the collecting agency would be able to deal with the lack of transparency and accountability within government structures, including NAC itself and local authorities.

Despite concurring views on the feasibility of collecting Aids Levy from the informal sector, capacity to pay was, however, cited as a key determinant.

The majority of those in the informal sector are involved in survivalist ventures with evidence showing that 40 percent of them earn less than US$200 per month while 11 percent do not have a monthly income.

The research was carried out in cities, towns and places such as mines and educational institutions.

It revealed that many respondents would appreciate NAC investing a bit more in educating them on how the current Aids levy is being utilised.

While the respondents showed their willingness to contribute to the Aids levy, they predicated their participation on the following conditions that: Government invests in formalising and boosting their operations the Aids Levy be integrated and collected as an integral tax such as Value Added Tax and that there be coordination between the Zimbabwe Revenue Authority and local authority revenue collectors in harnessing the levy.

“Though noble the idea is, the informal sector still lacks a proper system that can make it contribute meaningfully to the national economy,” said Peter Murwira, chairperson of Best Multiple Cooperative, which covers the largest Harare Magaba Siyaso informal business area.

‘The Aids Levy has certainly proved to be a good resource for the country’s HIV and Aids response,” says Onesimo Maguwu, UNICEF communications-knowledge management officer.

The levy was introduced in 1999 to compensate for the declining donor support, but now low salaries and poor performance of industry means not enough money has been collected.

In its 2010 report on Zimbabwe’s progress in implementing the declaration on commitment on HIV and Aids, adopted by the United Nations General Assembly in 2011, government admitted the levy was essentially non-existent in 2007-8 due to economic challenges the country is facing.

According to UNAIDS figures, more than 347 000 people are on antiretroviral (ARV) treatment. Another 600 000 need medication.

The Aids Levy contributed almost a quarter of the money to purchase ARVs, while 76 percent of the treatment programme was financed by international donors such as the Global Fund and the United Kingdom’s Department for International Development to fight AIDS, tuberculosis and malaria. –Own Correspondent

Source : Financial Gazette