On 9 October 2025, our country researcher Matron Muchena joined the policy dialogue on taxation organised by the Vendors Initiative for Social and Economic Transformation (VISET).
One important reflection came from the Director of the Ministry of Public Service, Labour and Social Welfare. She reminded us that the ongoing formalisation strategy now submitted to Cabinet for adoption is not merely about collecting taxes from the informal economy. Its deeper goal is to maintain order and accountability within it.
Another compelling insight: while the informal economy contributes significantly to employment and household income, its exclusion from formal taxation systems has led to limited revenue accuracy for the central government. In other words, we’re missing the full picture.
Taxing the informal economy, then, is not just about expanding fiscal space. It’s about promoting equity, transparency, and sustainable development. And yet, one question lingered throughout the dialogue: has the introduction of presumptive taxes actually promoted compliance?
Reflections from the Room
- On compliance and dignity: One speaker noted that formal taxation isn’t just about revenue, it’s about recognition. When citizens pay taxes, they claim visibility in the state’s ledger. But when systems are unclear or punitive, dignity erodes.
- On informal vs formal economies: A participant raised the tension between taxing informal traders and supporting their transition into formal structures. The question hung in the air: are we taxing survival, or enabling growth?
- On reform and representation: There was a call to reframe tax policy as a participatory tool where citizens understand not just what they owe, but what they own. Transparency, it seems, is the first step toward trust.
Later in the day, the Ministry of Women Affairs, Community, Small to Medium Enterprise Development addressed vendors and traders gathered for a policy dialogue. Their message was clear: create the market before producing the product. This shift in mindset, they argued, would help vendors align their efforts with actual demand and reduce losses from unsold goods.
The Ministry also outlined its loan structure: 25% of the funds are released as working capital, while the remaining 75% is paid directly to suppliers. Two loan types were mentioned, the Community Development Fund and the Women Development Fund.
Grounded Reflections from Vendors
- Safety and dignity for working mothers: One vendor painted a vivid picture of women selling goods with their children beside them in cardboard boxes, exposed to harsh weather and sudden disruptions. The plea was simple but urgent: Can the Ministry establish market spaces with adjacent play centres, so children are safe while mothers work?
- Tax education for the informal economy: Vendors called for clarity around taxation. Many who are taxed do not understand what the levies are for, nor how they relate to public services. Education, they argued, is the first step toward compliance and trust.
- Participatory planning for market spaces: A recurring concern was the Ministry’s top-down approach to infrastructure. Vendors urged the Ministry to consult them directly when identifying market locations. They know where customers naturally gather. Without this input, newly built markets risk being underutilised, while vendors continue crowding roadsides. Moreover, many of these spaces are priced beyond reach, excluding small traders and favouring medium enterprises.
With ZimCitizensWatch, we are tracking the government’s promise to develop and implement an action plan to facilitate the formalisation of the SMEs sector, as outlined in the National Development Strategy (NDS1). This dialogue offered a timely pulse-check. The Ministry’s emphasis on market-first thinking, structured loan disbursement, and taxation education speaks to early steps in that formalisation journey. Yet, the vendors’ reflections on safety, dignity, and participatory planning remind us that formalisation must be people centred. If not, it risks reinforcing exclusion rather than enabling growth. As we monitor this promise, we will continue to surface citizen voices and assess whether policy shifts are translating into lived improvements for informal traders.
