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Sikhulekelani Moyo, [email protected]

THE implementation of the Zimbabwe Industrial Reconstruction and Growth Plan (ZIRGP) 2024-2025 is set to address the informalisation of the economy where different measures including simplified tax models and registration will be used to encourage formalisation.

The transitional ZIRGP 2024-2025 focuses on growth opportunities in the industrial and commercial sectors, aimed at reducing the import bill and facilitating local production.

It also recognises underlying policy issues that need to be addressed during the process leading to the National Development Strategy 2 (NDS 2) and it is aligned to Sustainable Development Goals, Africa Union Agenda 2063, COMESA Industrialisation Strategy (2017-2026), and SADC Industrialisation Strategy and Roadmap (2015-2063) aspirations.

The Ministry of Industry and Commerce said according to the Zimbabwe National Chamber of Commerce (ZNCC) State of Industry and Commerce survey of 2023, Zimbabwe has an informal sector of around 71 percent.

The ministry said the apparent challenge with this scenario is that the few formalised businesses carry the tax burden for those who are not compliant.m This, however, results into high cost of production, which tend to reduce the competitiveness of local products.

“This is an undesirable trend and measures are needed to prescribe simplified registration and minimum mandatory licensing requirements that promote formalisation, through the Shop Licensing Act,” reads the ZIRGP document by the Ministry of Industry and Commerce.

“The adoption of simplified tax models for SMEs will be pursued to widen the tax base.”

“During the plan period, measures will be implemented to promote electronic transactions to address the growing informalisation.”

The ministry said the Government will, in line with the Whole of Government Approach, expedite the development of the SME Formalisation Strategy.

Businesses will be required to register and have functional bank accounts and the Government will also promote the use of plastic money and enhanced use of Point-of-Sale machines (POS) for all businesses where there is network coverage.

The ministry also said the coming in of Starlink to Zimbabwe is poised to significantly improve internet access in rural areas, which will also enhance the use of plastic money and POS machines.

Some of the interventions during the plan period include simplified compliance procedures for small retailers to encourage them to formalise, raising awareness by ZIMRA on the tax systems and tax compliance requirements, and enforcement of the route to the market mechanism.

In a foreword in the ZIRGP document, Industry and Commerce Minister Mangaliso Ndlovu said the operationalisation of the strategies and policies outlined in the ZIRGP will be implemented through sub-sector/industry-specific production and investment plans, which will be supported by a package of industry-specific incentives.

He said these sub-sectors have already been identified as the anchor industries where the value chains have national comparative advantage and which have the maximum potential to contribute to manufacturing value-added growth and contribute meaningfully to the African Continental Free Trade Area (AfCFTA) Agreement.

“The successful implementation of the 2024-2025 is dependent upon the collaboration of all stakeholders to achieve its objectives,” said Minister Ndlovu.

“The importance of ongoing and constructive engagement between Government, business, and labour cannot be overstated to achieve industrialisation objectives outlined in this plan.”

@SikhulekelaniM1