Africa-Press – Zimbabwe. President Emmerson Mnangagwa and his cabinet ministers endorsed Finance Minister Mthuli Ncube’s new measures on Tuesday, which include the introduction of a compulsory tax payment system to ensure all eligible taxpayers contribute.
Mnangagwa addressed the first Cabinet session of 2025 at the State House in Harare.
During the meeting, the Cabinet agreed that all vendors must be promptly issued Point of Sale (POS) machines and, as a result, must open bank accounts upon registration or licensing.
Cabinet also approved changes to the Foreign Exchange Management system, reducing the foreign currency retention level for exporters from 75% to 70%. A summary of the Cabinet minutes outlines these resolutions:
Cabinet considered and approved Measures to Address Challenges in the Formal Business Environment, which were presented by the Minister of Finance, Economic Development and Investment Promotion, Honourable Professor Mthuli Ncube.
Following the presentation of the Monetary Policy Statement by the Reserve Bank of Zimbabwe on 6 February 2025, Cabinet observed a number of factors that are negatively impacting on the economy and has therefore introduced a cocktail of short and long-term interventions aimed at addressing challenges in the economy and providing support to Micro, Small and Medium Enterprises.
In broad terms, the Government seeks to bring all businesses into the tax bracket and enhance the effectiveness of the foreign exchange market.
In the long-term, Government will address the business environment in order to streamline fees, charges and minimise duplication of work by Government Agencies as well as improve electricity supply. Such an environment will enable MSMEs to graduate into formal businesses.
Under short-term measures, the use of electronic money will now be compulsory for all businesses and shall be achieved through the following:
i. introduction of a compulsory tax payment system to ensure that every eligible taxpayer pays tax;
ii. establishment of a Domestic Inter-agency Team to ensure informal sector compliance with tax laws; and introduction of a framework which ensures that all vendor licencing by local authorities is done in consultation with Central Government.
It will henceforth be mandatory that all vendors are promptly issued with Point of Sale (POS) machines and that they open bank accounts upon registration/licencing.
Cabinet further endorsed refinement of the Foreign Exchange Management system; the reduction of the foreign currency retention level for exporters from 75% to 70%; a reduction in bank charges; and minimum Deposit Interest Rates.
Cabinet has further adopted the following medium-term measures:
i. to ease the Cost of Doing Business by streamlining processes, fees and charges, as well as duplication of work by Government Agencies to reduce the turnaround and cost to business;
ii. to ensure strict compliance with the Indigenisation and Empowerment Act which provides for certain areas as reserved sectors;
iii. to enforce the procurement of goods and services from local producers and suppliers in order to support local industry;
iv. to expedite the construction of power plants and upgrading of the distribution network to enhance the availability of electricity; and
v. to incentivise the use of alternative sources of energy and expedite social protection coverage to the informal sector.
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