EDITORIAL COMMENT: Harare authorities need to get a grip on businesses

Source: EDITORIAL COMMENT: Harare authorities need to get a grip on businesses | Herald (Top Stories)

The inefficiency of most local authorities in Harare province was highlighted again this week when it was found that around 70 percent of businesses are, at the very least, not up-to-date with their licensing, tax and rate payments with some never having bothered to be licensed in the first place.

Yet it is almost the middle of the year and by now the routine inspections by the City of Harare, Municipality of Chitungwiza and the Local Boards of Epworth and Ruwa should have uncovered who is operating without the required and fairly simple documentation and then action taken.

Local authorities tend to complain, continuously, that they do not have the cash to do anything very much yet do not take the required action to collect the money they are owed. More critically the licensing requirements were put in place to ensure the safety and health of customers.

This is one of the reasons why “Fort Salisbury” was given a sanitary board in the very early 1890s, more than 130 years ago, and why this was upgraded to a municipality, using Cape Colony municipal law, in the middle 1890s.

Others in the tiny town wanted to make sure their neighbours were not going to be a centre of disease or burn a block of basic buildings to the ground. And of course they wanted everyone to chip in when it came to funding the most basic of services, such as sanitation and grading the gravel roads.

Every business, no matter how small, is supposed to be either registered with Zimra or be paying the presumptive taxes and as they move up the ladder they come within the VAT orbit. But even stallholders in flea markets are supposed to pay a tiny presumptive tax each day, collected by the market owner, who needs to be licensed and a registered taxpayer and who is supposed to keep accounts and forward this stallholder tax regularly.

The requirements at the lower end are not onerous, just a visit to the Zimra offices and some basic bookkeeping.

Many small sole traders would not pay much, if anything, in tax since they are on the individual scales and so benefit from the tax free and low percentage bands so a few hours work every quarter would probably reduce their tax burden since presumptive taxes only kick in for unregistered operators

Unless someone wants limited liability, converting to a company only makes sense once your profits take you well into the top two individual tax bands, and considering the hassles and costs of company law, even with the legal clean up, only when you are in the top band.

Even a sole-trader hairdresser, by the time they produce receipts and account for rent, shampoo and the like will only be paying tax, at individual rates, on their very modest profits.

There once was time when every business used to display their municipal licence, plus the extra licence needed if they were running something like a take-away or lodge which required health inspections as well, and a tax clearance certificate.

It was just standard so when the inspector called they just waved at the wall and in any case their customers felt safe.

Now Harare Secretary for Provincial Affairs and Devolution Tafadzwa Muguti is cracking the whip, and has given this myriad of small medium and large businesses seven days to get up to date if they have slipped behind or to get licensed, registered and the like if they have never bothered.

Of course it should not need the provincial office of the Ministry of Local Government and Public Works to do this. The four local authorities should have sorted everything out long ago.

Mr Muguti’s main job should be assisting in the co-ordination, ensuring development and approach roads near the Manyame River bridges do mesh, and that local plans in the border wards are not at total odds and that shared services fit together and this sort of thing.

But then having his job in Harare Metropolitan Province must be one of the most frustrating in the Ministry, where he has to take over a lot of the enforcement work instead of concentrating on linking four administrations and advising his Minister of State while that major co-ordinating officer and link with central Government does his job.

The crackdown is obviously needed, but the deadline for total compliance might be on the tight side. So when the enforcement officials start moving around some allowance must be given, since after all the business owners will be dealing with the four administrations, and they seem to have their own accounting problems, plus in some cases several other entities.

Even if a business needs more time, that same business needs to show strong signs that they have started the process and that they are taking the by-laws and national laws seriously rather than just ignoring everything and hoping for the best.

Almost all the defaulting larger businesses at least probably just need to catch up, since they should at some stage have been licensed and registered and so need less time.

The huge growth in small businesses in the four authorities obviously needs inspectors who can offer advice to the genuine and serious and lay down realistic deadlines for such a person to work their way around the counters at Rowan Martin Building.

But, even with the semi-independence that the two municipalities have, Mr Muguti needs to breathe fire on the administrations so that they abandon their desks and start doing their job properly.

So many of the problems in the province from land barons onwards have arisen because local authority officials do not patrol and enforce, and at times according to charge sheets in court cases are the source of the problems. We have mayors, chairmen and councillors giving speeches about smart cities and sketching visions of what their authority will look like “tomorrow”.

But at the very least they should ensure that “today” the basic services are in place, which need efficient collection of fees and rates and then non-corrupt and efficient spending, so that there is the proper base to move onward.

Central Government is now active with some emergency work, major efforts to make roads usable, drilling boreholes for emergency water supplies, building the first new dam in 50 years and the like, but the councils need to respond and do their share, laid down in the Urban Councils Act, and even other State authorities need to be enforcing their regulations.

Mr Muguti is correct; we cannot run a huge and complex metropolitan area without a proper administration.

Even rural district councils and chiefs know who is farming where and most farmers are now registered with the Agriculture ministry. So it is difficult to understand why Zimbabwe’s major urban area has fallen so far behind.

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