Multiple regulatory requirements are hampering business start-ups in Zimbabwe due to the ‘burdensome’ registration processes, a study has shown, adding that if unchecked, the economy would continue to struggle for new business.
A report by the Zimbabwe Investment Authority (ZIA), United States consultancy firm Nathan Associates and the United States Agency International Development (USAID) shows that business start-ups can be viable if registration process is not ‘burdensome.’
“Without sweeping reforms of all its regulated transactions, however, Zimbabwe’s economy will continue to struggle. It’s not enough to create an elegant business formation regime if the new business cannot survive the regulatory tangle that remains,” reads the report which was released on Friday.
Companies are required to register with multiple authorities: the Registrar of Companies, Zimbabwe Revenue Authority (ZIMRA), National Social Security Authority (NSSA), the Environmental Management Agency (EMA) and Zimbabwe Manpower Development Fund (ZIMDEV) among others, a process seen as long, expensive and cumbersome.
“Initial registration of a new business for all national government purposes should be accomplished in one step, upon registration with Registrar of Companies. This will dramatically reduce the cost of compliance, and the rate of non-compliance with government agencies,” read part of the report.
It also recommended that registration with authorities like ZIMRA, ZIMDEV and NSSA be merged into single online process to reduce cost of compliance for businesses.
Zimbabwe is ranked 180 out of the 189 economies surveyed on the World Bank’s Doing Business 2015.
Municipalities, especially Harare, were urged to generate revenues without burdening businesses.
“City of Harare should consider modernising its Companies Act, which appears in many respects to be an outmoded inheritance of the British Colonial period,” the report read.
“It should be a simple, mandatory permit fee, justified by the need to provide city with revenues to fund services from which the businesses and the general population derive benefit.- The Source
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