PHILLIMON MHLANGA
Commercial space barons and cartels are wreaking havoc in the retail sector pocketing hefty United States dollars from desperate retailers seeking trading spaces, depriving the city council, private commercial property owners and individuals, of the much needed revenue, Business Times can report.
The barons are taking advantage of the current rush for retail space in the capital city, Harare.
Retailers, from large supermarket chains to small independently owned stores, now dominate the city centre.
An investigation by Business Times this week found that although retail space is booming with high demand in both the central business district and suburban locations, space barons are wreaking havoc.
They entered into lease agreements with the council, the National Railways of Zimbabwe (NRZ) and some pension funds for retail space, which is booming.
In turn they are sub-letting the premises and pocketing huge profits in foreign currency.
Business Times can report that the space barons are charging, depending on the size of the space, at least US$20,000 goodwill while monthly rentals are pegged at between US$5,000 and US$10,000.
The figure could be higher in other centres.
In turn, they pay paltry monthly rentals to the local authority, NRZ and pension funds, in Zimbabwe dollars.
Confederation of Zimbabwe Retailers president Denford Mutashu described the space barons as ‘monsters’.
The ripple effect, Mutashu said, has been felt more widely.
“Just like government is battling land barons, we have witnessed monsters we now call ‘space barons,” Mutashu said.
“Some retailers are asked to fork out US$20 000 as ‘goodwill’ which is not receipted but pocked directly by the ‘shop space barons’.
This is worrisome.
“After that one pays US$4000- US$10 000 rentals per month.
This has created anxiety on the market.
All rentals should be deposited into bank accounts and avoid the ongoing scourge.”
Zimbabwe retailers have also been hit by a value added tax (VAT) on rice packages of 25kgs and below which ZIMRA want backdated to February 2017.
Mutashu said there was need for “urgent” talks between government and the retail sector over the matter.
“Policies should continue to be a product of vigorous but progressive consultation between government and business.
The ongoing onslaught on business through demand for business to pay VAT on rice in retrospect and backdated to 2017, yet no one charged or collected it, has put a strain on the otherwise cordial relationship between government and business,” Mutashu said.
He added: “I propose that, VAT can be charged from now onwards and not backdate it to 2017.
