Only tax compliant traders to procure goods from manufacturers
Sikhulekelani Moyo, [email protected]
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has said as part of broader measures aimed at restoring order in the supply chain from manufacturer to the final user, only licensed and tax-compliant operators will be allowed to procure goods from manufacturers.
Recently, the Minister of Industry and Commerce Dr Sithembiso Nyoni noted with concern a growing tendency of hoarding goods by unscrupulous businesspeople geared at pushing up prices.
She said most wholesalers and retailers are buying basic commodities in bulk directly from manufacturers, depriving established traders of stock.
The development resulted in the flooding of goods in the informal sector while established operators run out of stock, resulting in artificial shortages.
Presenting the 2024 proposed National Budget yesterday, Prof Ncube said only traders registered for Value Added Tax (VAT) purposes and in possession of valid Tax Clearance Certificates are eligible to procure goods from manufacturers.
“In order to restore the supply chain from the manufacturer, wholesaler to retailer, I propose that only licensed and tax-compliant operators procure goods from manufacturers and wholesalers,” said the minister.
“In addition, I therefore propose that only traders registered for VAT purposes and in possession of valid Tax Clearance Certificates be eligible to procure goods from manufacturers,” he said.
Prof Ncube said the measure will also promote tax compliance as traders will need the certificates to be able to access goods from manufacturers.
Reacting to the proposal, Confederation of Zimbabwe Retailer Mr Denford Mutashu said this will go a long way in the restoration of the supply chain.
“It will go a long way in restoring the supply chain without short changing the Government on fiscal revenue. There is still a greater need to accommodate small and medium enterprises (SMEs) through a presumptive tax model to avoid crippling them at the budding stage,” said Mr Mutashu.
“As retailers, we are unapologetically calling upon the restoration of formal channels of supply. We used to have a strong supply chain but now through these middlemen, goods are being offloaded in the informal market where they tend to sell goods specifically in forex.
“People are earning local currency and they end up being forced to buy forex from the parallel market, which has created unnecessary demand for the United States dollar leading to a rise in exchange rates.”
He said people without shop licences, but holding United States dollars are now being given goods, which have led to the distortion of the supply chain.
He also called upon retailers and wholesalers not to hold their purchase on sale (POS) machines so as to allow people to buy using local currency.
Mr Mutashu said there is a need to get rid of the runners and middle who are now supplying the informal market with goods at the expense of established shops. —@SikhulekelaniM1