The Zimbabwe Revenue Authority (Zimra) has threatened to garnish Victoria Falls City Council over unpaid informal traders’ presumptive tax the local authority was supposed to collect for the past year.
In terms of the Finance Act number 10 of 2020 the council was expected to collect $3 250 every month as tax from informal traders and remit to Zimra.
When this came into effect in 2021 and council engaged traders to collect the presumptive tax, there was serious outcry and resistance and no collection was done.
The presumptive tax accumulated and Zimra recently wrote to the council demanding immediate payment of all outstanding tax with respect to informal traders’’ tax or risk having their accounts garnished.
It’s now clear how much the council is supposed to pay to Zimra because a majority of vendors closed shop due to Covid-19 and some have not been able to resume business.
“Our records show that at the end of the year you have not been collecting informal traders presumptive tax from informal traders operating from your rented spaces despite reminders on this to you.
“Please may you immediately regularise this and remit all the outstanding informal traders’ tax to Zimra. Failure to meet this request will leave me with no option but to enforce stringent reparation methods without any further reference to yourselves,” read a letter of demand from Zimra.
Fearing to be garnished, the local authority has started billing informal traders to clear the outstanding debt.
This means vendors are paying the current tax and outstanding amounts, on top of the rentals for the vending stalls.
Victoria Falls’ informal market is dominated by curio and craft vendors who sell to tourists and have not been realizing any meaningful business owing to low arrivals.
Flea market operators and vegetable vendors have also been complaining about an influx of hawkers who sell on the streets and also move door-to-door thereby taking away all potential customers.
The council finance director Neville Ndlovu said Zimra expects the local authority to pay all outstanding tax.
“We have people that are operating in our premises and should be charged $3 206 per unit per month, money which we should be remitting to Zimra. This was not done because of resistance so Zimra is saying us as the landlord we need to collect all the outstanding money and remit and will charge us if we fail,” he said.
Zimra once garnished council accounts a few years ago over unpaid monies.
Councillors however have said Zimra should collect taxes on its own directly from informal traders.
Deputy mayor Patricia Mwale said the money is exorbitant for informal traders considering that business was very low.
Vendors spoken to said the council started billing them last month.
They said each paid US$10 per vending stall and will be billed until the debt is cleared.
Victoria Falls Informal Traders Association chair Ian Sibanda said informal traders were concerned because a majority of them were struggling due to the effects of Covid-19.