Business Writer
In a bid to curb proliferation of smuggled, counterfeit and underweight products that are flooding the market, Government has created a national taskforce on business malpractices chaired by the Ministry of Industry and Commerce to crack down on the illicit trades and reports say the taskforce that has commenced intensified operations nationwide, has already successfully caused the prosecution of 132 businesses.
The crackdown that commenced late last year, is being coordinated by the ministry in partnership with the Zimbabwe Revenue Authority, the Consumer Protection Commission and other key stakeholders such as the law enforcement department.
The multi-agency crack team targets importers and cross-border transporters involved in smuggling and other unethical business practices.
Last year, the Government, through a high-level task force on business malpractices established by Cabinet, launched a multi – agency operation to clamp down on smuggling and unethical business practices.
The authorities believe smuggling is undermining local industries and other law-abiding corporate citizens who pay taxes and is also threatening consumer welfare by selling products that do not undergone safety checks.
On its X (former Twitter) handle, the Ministry of Industry and Commerce said a command centre was established to direct anti-smuggling and business malpractice surveillance.
“To date, 1 817 businesses have been inspected with 132 prosecutions, 214 compliance notices and 2 915 units of various products have been seized,” reads the post.
“The taskforce continues to conduct routine surveys to monitor the prices and availability of basic commodities across the country’s 10 provinces with the ultimate goal of safeguarding and promoting consumer welfare in the economy.”
Businesspeople and experts have commended this initiative saying this will promote local industry growth and increase revenue for the country.
Bulawayo Provincial Affairs and Devolution Permanent Secretary, Mr Paul Nyoni, said since the commencement of the blitz, local products are now dominating shelf-space in shops.
“This blitz has promoted the presence of locally made products. If you go around in town, some of these products, including luxuries, which we used to spend a lot of foreign currency on, are no longer being imported because they were mainly brought in by smugglers,” he said.
“Now you find an alternative, so nine times out of 10, you are getting more of our local products and what that does is it keeps revenue in the country and protects employment for our people.
“For example, if you walk in one of these large supermarkets, you will not get those imported chocolates, but you get the local ones, and that is the purpose of the blitz.”
Mr Nyoni clarified that imported goods are not banned, but should just pay duty, adding that local products should be always cheaper than foreign ones.
“Even in flee markets, no one is being barred to sell those clothes except for second hand clothes . . . as long as it’s new and you have imported it, pay your way so that you arrive at a fair price, vis a vis the local products,” said Mr Nyoni.
“I think this has worked very well, I see the increase in production from those companies that produce products like mealie meal, rice and clothing because of that blitz.
“That is the focus, the focus is on local products first, as for imports, if you want, pay, give Government it’s revenue, follow the law and you sell.
He said there is still a market for those who want to import, but insisted the bigger market should be reserved for local goods.
Local industries have been for so long expressing their concerns on the issue of cheap imports, saying that these affected the viability of local products.
Many firms have registered depressed capacity utilisation, in the process affecting the workers employment status.
Government is aware of the challenges formal businesses face due to informal sector competition adding will soon announce a raft of measures to support the survival of the formal sector and ensure the informal players also comply with legal requirements such as tax compliance.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, revealed this after some retailers raised concerns over the unregulated informal sector, which they argue offers goods at much lower prices, largely because it operates outside compliance with statutory obligations such as registration, taxes, licensing fees and labour laws.
Prof Ncube said the reason why retailers were under pressure was due to increased informalisation of the economy and rampant smuggling.
“So, the informal sector is really squeezing out the formal sector and as Government, we are going to embark on an accelerated programme to make sure that the informal sector complies with whatever requirements they should comply with — be it licensing requirements, be it payment of taxes, be it selling goods at properly designated areas; for example, where they ought to sell,” he said.
“So, compliance issues are a big issue in that sector. For instance, we need to come and formalise the informal sector so that it begins to behave in a manner similar to how the formal sector players are behaving.”
Prof Ncube also confirmed that Government had embarked on a blitz around the country’s borders to reduce smuggling that was also fuelling informalisation and making it harder for the formal sector to compete.
“We also stand ready as Government to support formal retailers for them to ride the storm and this fierce competition from the informal sector.
“We are doing everything we can; we will be announcing and implementing some measures to support the formal sector, but at the same time making sure the informal sector begins to comply with the tax, licensing and registration provisions that were put in place,” he said.
So far the Zimra has impounded goods valued at approximately US$2,4 million in a multi-agency operation targeting importers and cross-border transporters involved in smuggling and unethical business practices.
The operation has resulted in the seizure of dozens of vehicles, including cross-border buses and haulage trucks, and confiscation of illicit goods such as foodstuffs and second-hand clothes.
Zimbabwe National Chamber of Commerce president, Mr Tapiwa Karoro, also concurred wit Government, adding that there was a need to address economic pressures.
He said the implementation of measures that address disparities between the formal and informal sectors was welcome.
“The growth of the informal sector, where vendors often sell groceries in front of grocery stores and clothes outside established retailers like Edgars, undermines formal businesses.
“These informal traders operate with fewer regulatory and cost burdens, putting formal players at a competitive disadvantage,” Mr Karoro said.
ZNCC, he said, was advocating for a collaborative approach to addressing the existing challenges.
