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INFORMAL ECONOMY FORMALISATION IN ZIMBABWE UNDER NATIONAL POLICY FRAMEWORK THEME 3 – MARKET ACCESS AND INFRASTRUCTURE

 The Objective of this Theme is the establishment of secure market spaces for informal economy businesses in both urban and rural areas.

1. Provision by Local Authorities of Appropriate Market Spaces and Facilities for Informal Economy Businesses

Local authorities need to engage informal traders from the start to ensure that market spaces and facilities are appropriate in terms of providing access to markets as well as water and electricity. The design should also ensure that goods are protected from natural elements and that there is no congestion.   The provision of storage facilities and toilets, together with facilities that meet the needs of women and PWDs and security for the traders who will use them, is essential.    Failure to consult will result in wasted resources as the facilities will not be utilized.

The L-T-R approach is to bring the local authority, trader and retailer together to come up with a design that addresses the issues of market access and infrastructure development at the same time. The local authority will provide space convenient for the traders and the retailers and the latter can assist in building proper infrastructure for informal sector traders.  This infrastructure will serve as a cost-effective method of advertising for the retailers and the traders will refer customers to them or become suppliers in their value chain.   This will be effective in getting people off pavements, minimizing harassment of informal sector traders and mitigating current conflict over highly contested spaces. It creates a win-win situation between the formal and informal businesses.

2. Simplification of Tax and Business Registration Procedures for Informal Economy Businesses 

Informal economy traders are discouraged and de-motivated by the numerous and complex steps they have to go through to register or to pay tax. However, a one-stopshop where all registration documents are submitted and taxes collected will simplify the process and reduce the burden on informal traders. This will make it easier and hence be an incentive to them to register and pay tax. 

The Ministry of Finance should remove the multi-tax system which is an impediment for informal traders.   A simplified tax system can be introduced for micro-businesses whereby informal traders can make single payments to ZIMRA to meet their tax obligations.

Mechanisms such as declaration of sales for additional tax can be put in place and tax rebates offered on occasion for compliance.

3. Establishment of Trade Facilitation Facilities for Cross-Border Traders

Bulk permits are a trade facilitation tool through which cross-border traders can apply for a permit to import goods of up to 10 000 tonnes. This system can be utilized to assist informal traders at the border carrying small quantities, where the quantities are simply deducted from the bulk permit until the quantity on the permit is used up.

To facilitate the ease of doing business for cross borders, a one-stop-window system should be set up where all customs documents, export and import licenses and other documents are processed.

There is a need to expand the list of goods on the common list of eligible goods under COMESA’s bilateral agreements.

A gendered approach will ensure that all systems and infrastructure take into account the needs of men and women so that women, who are vulnerable to abuse, can conduct their trade without hindrance. There is a need to raise awareness of the nontrade barrier (NTB) reporting system so that traders can use this to report threats to their safety and businesses.

INFORMAL ECONOMY FORMALISATION IN ZIMBABWE UNDER NATIONAL POLICY FRAMEWORK THEME 3 – MARKET ACCESS AND INFRASTRUCTURE

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