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THE Zimbabwe Revenue Authority (Zimra) has recommended to the government to reduce taxes for retailers as the influx of illegal vendors in cities and towns is threatening their survival.

Zimra commissioner general Gershem Pasi said this was in light of challenges that many retailers were facing as they have to contend with vendors who sell their wares on pavements in front of their shops.

Retailers argue that the vendors are crippling their operations as they often sell similar goods as theirs at lower prices, disadvantaging them as they have to pay rentals and taxes.

Pasi said the influx of vendors had also contributed to the high rate of tax evasion.

Zimra is owed over $1 billion in unpaid taxes, a situation blamed on the current economic challenges.

“The levels of presumptive taxes given the current set-up we believe they’re a bit on the high side and perhaps we need to reduce them so that we encourage more people to comply, because the higher the rates and especially with a difficult economic set-up like we have, there’s a higher incentive for people not to comply,” said Pasi.

“We’re receiving complaints from formalised businesses that with the mushrooming of vendors almost everywhere in our cities they find that they’re no longer able to do sufficient business to meet their tax obligations.

“They find it difficult now to pay their rates, their income tax obligations, so it’s a challenge which I think needs to be addressed.”

In light of the representations, Pasi said a proposal had been made to Treasury.

“Of course with these challenges we’re always looking at how best we can improve or deal with them and one of them is a recommendation which we’re making to the Ministry of Finance to review the rates down and when the economy improves, we can then see whether there’ll be scope to increasing the rates,” he added.

Zimra granted a tax amnesty for all classes of taxpayers for tax offences committed between February 1, 2009, and September 30, 2014.

Applications for the amnesty opened in October last year and the window period was due to expire yesterday, June 30, with the deadline having been extended from March this year following a poor response by the beneficiaries. — New Ziana.