By Panashe Chikonyora
Confederation of Zimbabwe Retailers Association (CZR) president Denford Mutashu has implored local authorities to review the recently increased licence fees downwards as the steep hike will promote growth of the informal sector.
This comes after the City of Harare council increased shop licence fees by 88 percent from $3 604 to $6 758 percent respectively.
Which according to the authority is meant to keep them viable in conducting their duties efficiently.
“We have increased our figures in inflation adjusted terms so that we are able to discharge off our mandate as an authority,” said city council corporate communications manager Michael Chideme.
However, the increase comes at a time when most retailers are finding it almost difficult to operate in the country’s challenging economic environment, as consumer spending has gone down due to hyperinflation, which continues to erode disposable incomes.
Increased fees amid falling revenues, market watchers say, will force shop owners to close and resort to doing business the informal way, as they cannot afford to pay for licences in order sustain their businesses.
In an interview with the Herald Finance & Business Mr Mutashu said the sector is getting impoverished by the high shop licence fees which are reflecting pegging in USD parallel market rates by local authorities.
“The fees will force more players to go informal and flies on the face of ongoing efforts to persuade informal players to formalise.
“Surprisingly small towns have the highest licence rates. Some of our players in Marondera will part with about $160 000 and one wonders if those deciding such obscene fees ever run businesses. Therefore CZR implores local authorities to review licence fees downwards by at least half of the current rates.
“Government should intervene through the Ministry of Local Government, otherwise formal retailers and wholesalers are dying a slow but painful death. It’s hard for someone to close shop after establishing good will with your community,” he said.
Meanwhile, licence and health registration certificates fees for several sectors have risen.
Both hotels and insurance firms’ licence fees have also gone up by 87 percent. With the former going up from $13 701 to $25 689 and the latter to $5 161 from $2 753.
The Zimbabwe Energy Regulatory Authority (ZERA) recently increased the petroleum sector operators’ annual licencing fees for procurement, retailing (urban area), retailing (rural area), wholesale, blending, production, production biodiesel, LPG retail and LPG wholesale to $2 000 000, $10 000, $4 000, $122 400, $76 500, $306 000, $306 000, $1 530 and $30 600 respectively. The Herald