REVENUE collected by Kwekwe City Council from shop licences has dropped by nearly half, as shop owners are reportedly avoiding paying licence fees.
Mayor Matenda Madzoke has blamed the latest drop in revenue on the Zimbabwe Revenue Authority (Zimra), which has instructed the local authority not to issue trading licences to any operator who does not have a tax clearance certificate.
“Since Zimra directed us not to issue shop licences to shop owners who do not have tax clearance certificates, our revenue dropped sharply compared to previous years,” he said.
“We have failed to collect over $500 000 because of the involvement of Zimra in our business.
“I feel it is wrong for them to use us in that way and affect our operations in the process.”
Zimra recently teamed up with local authorities, in a move which has seen councils being forced to withhold trading licences to businesses which do not have tax clearance certificates.
Those who do not qualify for tax clearance certificates will be required to pay presumptive tax and given clearance before they can be given trading licences by the local authority.
Health services deputy director John Bandama recently told council that most small-scale business operators, who now form the majority of traders, were playing hide and seek with the local authority because of Zimra.
He said council revenue on trading licences had significantly dwindled in 2015 compared to last year when council collected over $1,2 million in the first month of the year.
“It is because of the conditions which we have been given by Zimra that we have recorded a significant fall in revenue collection this year,” Bandama explained.
“Where we should have already collected over $1,2 million, council only has $700 000 as most small businesses shun collecting licences, while others are still in the process of getting clearances, a process, in my view, which is unnecessarily long.”
Council said it was now moving to bar traders who had not yet paid for shop licences with its health department.
“We have now started closing shops of those who have not paid, even if they are still sorting out their papers with Zimra because we cannot continue to allow them to operate without proper papers,” Bandama said.
Madzoke said if his local authority could have its way, Zimra was just supposed to do its work without involving them.
“We would have been happy with a situation where they conduct their own business, while we do ours, but we cannot do anything because it is what the law says, but honestly it is affecting council business now,” he said.