
Rutendo Nyeve, Sunday News Reporter
THE Government has issued a stern warning to suppliers against directly supplying goods to the informal sector, citing concerns that the practice is undermining formal businesses and distorting the economy.
The warning follows an emergency meeting recently chaired by President Mnangagwa, who cut short his annual leave to address the worsening economic challenges.
Speaking in an interview with Sunday News in Bulawayo yesterday, the Minister of Finance, Economic Development, and Investment Promotion, Professor Mthuli Ncube, urged suppliers to refrain from bypassing wholesalers and distributing goods directly to informal retailers, emphasising the negative impact on the formal economy.
As a key element of the Government’s multifaceted strategy Prof Ncube said the Government views this practice as a major contributor to the growth of the informal economy and to curb this, the Government will enforce a five percent withholding tax on those found to be non-compliant with tax requirements.

Professor Mthuli Ncube
“I want to discourage suppliers from supplying directly to this informal sector, circumventing the wholesalers and formal retail sector. We are insisting on a five percent withholding tax as the charge for those who are not compliant with the tax requirements,” he said.
Prof Ncube elaborated further on a series of measures aimed at formalising the economy and levelling the playing field for businesses.
He said the Government is cognisant of the core issue which is the excessive informalisation of the retail sector, which puts formal businesses at a disadvantage due to regulatory burdens and other challenges.
“The formal sector is unable to compete successfully given some of the regulatory burdens they face. So, the statement I issued on Friday has to do with how we can deepen formalisation of the economy, making sure that anyone operating in the sector is appropriately licensed,” he said.
The Government is now mandating that all businesses operating in the retail sector be appropriately licensed, with co-ordinated licensing efforts between local authorities and Central Government.
Furthermore, every operator will be required to have a point-of-sale (POS) machine. Banks are also being directed to issue POS machines to all new account holders, as opening a bank account will become mandatory for businesses.
The move aims to formalise transactions within the sector and improve revenue collection.
“Banks must make sure that as they open their (informal sector) accounts because we are also making the opening of bank accounts a mandatory issue, they should issue them with POS machines to make sure we can formalise the transactions within the sector,” he said.
These measures signal a renewed commitment by the Government to formalise the economy, boost revenue collection, and create a more equitable business environment for formal businesses struggling to compete with the burgeoning informal sector.
The Government believes these interventions will help stabilise the economy and promote sustainable growth.
In Bulawayo, several suppliers park their trucks in the early morning hours in places like the 5th Avenue Market where informal traders buy the goods in bulk.
The goods are then sold by informal traders on the streets around the CBD.@nyeve14