Retailers seek govt protection
BUSINESS REPORTER
The Confederation of Zimbabwe Retailers (CZR) has urged the government to implement further measures to continue protecting the industry.
In a a letter addressed to Industry and Commerce Minister Mangaliso Ndlovu, CZR president Dr Denford Mutashu said several issues still affect formal retail operations.
“The informal sector now dominates the retail industry, particularly in the Fast-Moving Consumer Goods (FMCG) segment, enjoying significant advantages due to the lack of regulation,” Dr Mutashu said.
“Formal businesses are subject to stringent regulations.”
Among the primary concerns raised was the need for clear regulations governing the informal sector.
Dr Mutashu proposed that the Government introduce similar rules, particularly around currency usage, exchange rates and licensing, to ensure fair competition.
He called for a fully floating exchange rate to address discrepancies between official and parallel market rates, which have distorted pricing and created an uneven playing field.
In addition, CZR also advocated for sweeping changes to the licensing system.
“Formal retailers are required to navigate up to 26 different licenses to operate, resulting in significant costs and bureaucracy, which discourages investment and promotes informality,” he said.
Streamlining this process into a single, affordable license would reduce corruption, lower administrative overhead, and create a more business-friendly environment.”
Dr Mutashu highlighted the role of local investment in bolstering the formal retail sector.
By offering targeted incentives, such as reduced corporate tax rates or tax holidays for capital investments, he believes that Zimbabwe can stimulate greater investment and job creation within the industry.
He suggested duty-free importation for capital goods, which would further incentivise local investment and enhance the sector’s competitiveness.
Another key issue raised was the impact of the Intermediated Money Transfer Tax (IMTT), which the organisation argued worsened financial pressure on formal businesses.
“The IMTT has pushed many retailers to rely on cash transactions, which undermines financial transparency.
“Exempting formal businesses from this tax or allowing it to be treated as prepaid corporate tax would encourage more formal transactions and improve the stability of the sector,” he said.
Supply chain inefficiencies, high import duties on FMCG goods and ongoing power outages have led many retailers to rely heavily on diesel generators were also cited.
Dr Mutashu proposed various measures to reduce operational costs, including exemptions from the Bureau Veritas certification process, lower import duties for select FMCG items, and subsidies on diesel purchases for retailers.
VAT on formerly zero-rated products was highlighted, with the CZR urging the government to reintroduce VAT exemptions for essential goods to ease the burden on both retailers and consumers.
Dr Mutashu called for a comprehensive review of import regulations, suggesting that more flexibility could reduce smuggling and increase consumer choice.