Formal businesses pushed to the brink

TATENDA CHIKARA IN MASVINGO

Zimbabwe’s formal businesses are being pushed to the brink by the informal sector, whose business is thriving, the Confederation of Zimbabwe Retailers (CZR) has said.

CZR president, Denford Mutashu, told Business Times formal businesses returns were adversely affected since they pay taxes to the government as well as trade licenses from local authorities.

“The continuous increase of those who manufacture and sell goods in the informal business is seriously affecting returns on the formal businesses that are doing their businesses legally. The informal traders do not pay taxes, do not have licenses and they also pay workers any amount because they do not work following the demands of the Labour Act,” Mutashu said.

He said the association was engaging the government and local authorities to intervene so that the operations of formal businesses cannot continue to be affected.

If the informal business can be regularised this will lessen the competition between formal and informal business,” he said.

The Consumer Council of Zimbabwe acting director, Rosemary Mpofu, said consumers were  rushing to buy from informal traders because their goods were affordable as compared to formal business.

“As Consumer Council of Zimbabwe we are receiving concerns from big retailers who are saying that their businesses have been affected by the mushrooming of informal traders in front of their premises. We understand that those consumers are rushing to buy from informal businesses because it is cheap since they do not pay overheads like big retailers,” Mpofu argued.