THE Zimbabwe Revenue Authority (ZIMRA) has intensified efforts to collect taxes from the informal sector as it desperately seeks to shore up State coffers.

The country’s informal sector has expanded over the years, absorbing the bulk of the retrenched and the unemployed graduates.
For some time now, government has been eager to find a way to tax the informal sector players, who include traders and manufacturers of an assortment of household and industrial products.

And in an effort to capture a proportion of the sector’s income, government a fortnight ago introduced a number of new taxes targeted at the informal sector including hair dressers, commuter omnibuses, airtime vendors, driving school owners, tobacco farmers and many others.

Tax experts told the Financial Gazette’s Companies & Markets (C&M) that the move would improve revenue collection but highlighted that implementation would be difficult.

They said it was not going to be easy for government to tax the informal sector because most of the players did not keep records of their business.A large number were unregistered businesses and many others did not have fixed places of operation.

Government started implementing the plan a fortnight ago, enforcing the introduction of a 10 percent withholding tax on tobacco farmers without tax clearance certificates. But that move was reversed after farmers protested at tobacco auction floors.