‘Bad laws turn citizens into criminals’


SMALL and Medium Enterprises Association of Zimbabwe’s (SMEZ) executive director Farai Mutambanengwe yesterday chided government’s economic policies which he said are turning citizens into criminals.

His sentiments come as the local Zimbabwe dollar has continued to tumble against major trading currencies of the world, reviving appetite to use the United States dollar (USD) to store value.

Both citizens and businesses have also turned to the black market for foreign currency — which is currently at 27 against the USD — leaving the depressed interbank market, which is fetching a lower premium of around 18.

During his remarks at the Financial Gazette Annual Tax Review Forum yesterday, Mutambanengwe said the current economic crisis is also pushing businesses to informalise their activities in a bid to remain afloat.

“You ask why non-compliance? The simple reason is bad growth. There are glaring inconsistencies in the macro-economy.

“The deputy minister of Finance mentioned it himself that formal businesses are informalising and the question is why?

“And everyone including the deputy minister is transacting on the parallel market.

“Every single one of us transacts on the parallel market, and one way or the other we are breaking the law.

“We just have to be honest. All of us, it’s either we transact on the parallel market or we purchase goods using US dollars because that is what the country has become.

“The issue is if you issue bad law, everyone becomes a criminal. We must make the economy conducive for formalisation (of business).

“If the informal sector is informalising, it means the environment is not working,” he said

Mutambanengwe also urged the Zimbabwe Revenue Authority to simplify the tax regime, including the registration processes which he said are complicated for most small and medium enterprises (SMEs).
The informal traders are expected to pay presumptive tax.

He highlighted that some distortions are due to regulations for revenue as opposed to regulation for growth, thereby encouraging capitalisation.

“Together with the Small and Medium Enterprises ministry and , we worked on a proposal to say let the presumptive tax be three percent, and it was rejected by the Finance ministry.

“We were saying at least cross-border traders will be paying something.
“So, it’s not like we (SMEs) don’t want to participate in tax systems, but it’s being made impossible for us to do so,” Mutambanengwe said.

1 Comment
  1. Nitram2 says

    If the economy collapses then people become criminals. There is nothing wrong with the law. The government must follow the law and people will do the same. If government breaks the law then everyone becomes a criminal the country becomes a jungle it is today!

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