By Rungano Dzikira

Government is set to avail capital credit lines to small and medium scale businesses as well as informal sector in a bid to boost productivity within these segments, as it seeks to grow revenue collected from these sectors in the next financial year.

Speaking during a budget consultative meeting between the Ministry of Finance and Economic Development and industry ahead of the 2020 national budget, treasury said that there was need to cushion informal sector in order to improve the business climate in the country.

“Currently, the informal sector is a safety net providing both employment and income for most people in the country. This consultative meeting is therefore set to identify areas of improvement as to embrace the new normal economy in policy formulation while gauging business performance,” said Finance permanent secretary, George Guvamatanga.

Contributions at the consultative meeting intimated that Government should therefore move to recognize the informal sector’s contribution towards economic growth, even in terms of business achievement awards, and not necessarily limiting informal sector to Small to Medium Enterprises (SMEs).

“There are millions of dollars circulating outside the formal sector that is untaxed and unbanked. Government seeks to tap in that money in taxes for the year 2020,” Guvamatanga added.

Though government has already put in place a host of measures to induce appetite to export, and measures to address the Ease of Doing Business, emphasis still needed to be placed on factors that boost the informal sector.

Treasury said it will also provide a platform to formally register business concerns towards policy makers on policy issues that are impacting negatively on businesses in-order to come up with solutions.

The informal economy is an important component of most economies in the region, contributing between 25 and 65% of GDP and between 30 and 90% of total non - agricultural employment.