In a bid to fortify the retail sector against unfair competition from informal traders, the Zimbabwe Revenue Authority (ZIMRA) has initiated a series of measures outlined in compliance with the Finance (No. 2) Act 13 of 2023. The directives, introduced by the Minister of Finance, Economic Development, and Investment Promotion, aim to bolster the integrity of the value chain while countering the undue advantages experienced by informal traders.
A pivotal measure announced by ZIMRA involves the prohibition of direct purchases from wholesalers for non-VAT registered entities, notably impacting manufacturers and wholesalers. According to the new guidelines, companies lacking VAT registration and a valid tax clearance certificate will be barred from procuring goods directly from manufacturers.
Furthermore, eligibility criteria have been established for economic players across the value chain. Manufacturers are now mandated to sell exclusively to licensed wholesalers who hold VAT registration, ensuring adherence to tax laws and business legitimacy.
Retailers, in turn, must possess retail licenses, VAT registration, and current tax clearance certificates. Moreover, stringent purchase regulations have been introduced to regulate transactions. Notably, retailers’ purchases from wholesalers are capped at USD 1,000 (or its ZWL equivalent) within a 30-day period, underscoring a concerted effort to curtail monopolistic practices and promote fair competition.
Crucially, the definition of “informal trader” has been clarified to encompass various entities, from street vendors to tuck shop operators, aiming to encompass a wide spectrum of businesses operating outside formal registration parameters.
