By Fanuel Chinowaita
Mutare, 26 January 2026— Stakeholders drawn from the informal sector, government departments and civil society convened for an Open Policy Dialogue on Informal Sector Taxation, a meeting held under the Local Accountability for Citizen Engagement (LACE) project, with support from the Foreign, Commonwealth and Development Office (FCDO) and Development Alternatives Incorporated (DAI).
The dialogue, organised by the Vendors Initiative for Social and Economic Transformation (VISET) and the United Mutare Residents and Ratepayers Trust (UMRRT) on Friday in Mutare, sought to strengthen engagement between informal traders and policymakers, with a particular focus on tax compliance, formalisation and access to government support mechanisms.
Addressing participants, ZIMRA Revenue Officer Tafadzwa Takwana urged informal traders to regularise their operations, noting that compliance documents are critical for business sustainability.
He said all traders are required to have ZIMRA registration papers, including a Tax Clearance Certificate (ITF 263), which can be obtained at no cost once a taxpayer is compliant.
“The Tax Clearance Certificate is crucial because it proves that a taxpayer’s affairs are in order. Without it, traders risk a 30 percent withholding tax when transacting with formal businesses,” Takwana said, adding that the certificate is auto-generated for compliant clients.
Takwana further explained that informal traders are required to keep proper business records. These include invoices and receipts, bank statements, deposit slips, cash books and records of income and expenditure.
For traders involved in cross-border business, he highlighted the importance of customs clearance documents, manufacturer or wholesaler invoices and the COMESA Simplified Trade Regime (STR) form, which allows preferential treatment for qualifying goods.
He also reminded traders that registration with ZIMRA must be done within 30 days of commencing business through the TaRMS Self Services Portal, after which a Taxpayer Identification Number (TIN) is issued. Traders whose annual taxable turnover exceeds or is likely to exceed US$25,000 are required to register for Value Added Tax (VAT), while employers must register with ZIMRA within 14 days of engaging employees.
Representing the Ministry of Women Affairs, Community, Small and Medium Enterprises Development, Mr Matandare, on behalf of Director Gabriel Jaji, outlined government programmes aimed at supporting informal traders through formalisation.
He said the Ministry is implementing the SME Policy (2022–2025), which is currently under review for the 2025–2030 period, with a strong emphasis on formalisation, financial access, and innovation.
“Formalisation allows informal traders to access finance, grow their businesses, and contribute meaningfully to the economy,” he said.
Matandare explained that the policy classifies enterprises as micro (1–5 workers), small (6–33 workers), and medium (34–75 workers), and is designed to help businesses scale up and create employment.
He also highlighted Internal Savings and Lending Schemes (ISALS), locally known as mikando, as a key financing mechanism for informal traders. These schemes allow members to contribute savings and borrow at agreed interest rates and can be registered to improve accountability.
“As a Ministry, we provide free training on how to manage these savings schemes. Payment is only required during registration,” he said.
He further noted that women entrepreneurs can access the Women Development Fund, under which qualifying groups received funding equivalent to about US$3,000 in 2025. Under the facility, 25 percent of the funds are disbursed in cash, while 75 percent is paid directly to suppliers. Beneficiaries are required to operate as registered groups with constitutions.
During the dialogue, participants raised several challenges affecting the informal sector. Traders expressed concern over the demolition of tuckshops, saying the move has disrupted livelihoods, as many depend on such businesses to pay rentals, council bills, and school fees.
Calls were made for councils to consider affordable daily levies instead of demolitions.
Youth representatives said they face difficulties accessing loans due to stringent collateral requirements by banks, while people living with disabilities reported exclusion from social grants and a lack of designated trading spaces.
They called on local authorities and government to introduce quotas for people with disabilities, similar to existing youth and women quotas.
Women participants also raised concerns around maternity-related challenges, alleging that high costs and corruption within the health system place an additional burden on women traders who require medical procedures.
The Ministry of Women Affairs, Community, Small and Medium Enterprises Development reiterated its mandate to empower women, promote gender equality, and support the growth of MSMEs through policy development, financial inclusion, and skills training, as part of broader efforts to reduce poverty and drive inclusive economic growth.
The event concluded with a call for increased collaboration between the government, informal sector representatives, and financial institutions to foster a more inclusive economic environment that supports the growth and sustainability of informal traders.