Staff writer
The Zimbabwe Congress of Trade Unions (ZCTU) has warned that 2025 is going to be a ‘bloodbath’ unless government takes decisive measures to save the retail sector from total collapse.
ZCTU Acting Secretary General, Runesu Dzimiri said its a grimy picture as the retail sector has so far retrenched over 1000 workers.
“Our affiliate that represents workers in the supermarkets has so far indicated over 1000 jobs have been lost due to closure or scale down by supermarkets, and imagine this is just two months into 2025,”said Dzimiri.
” We are just talking of major supermarkets, but there are a number of smaller supermarkets that are also struggling to survive. Some of these smaller shops do not even bother to report when they retrench. I might not be able to give you exact figures but we are talking of thousands of jobs at risk. It is really carnage and it will be a bloodbath in 2025 compared to 2024 if the government does not work out something for the sector.”
Dzimiri said government must act before serious repercussions in the economy are felt.
“The government must realize that there is serious impact on the economy if the retail and wholesale sector is left to collapse. First, when jobs are lost, government will also lose revenue not only on corporate taxes, but also in the form of Pay as You Earn (PAYE) and it will obviously fail to meet its operational requirements as well as meeting social services. As PAYE is depleted, the Value Added Tax will also be eroded as workers will not have disposable income.
“Already the government is struggling to pay its workers due to a dwindling tax base and this explains why the minister of Finance is coming up brutal and desperate measures of taxing everything he can lay his hands on to run the economy. He has introduced other taxes such as Fast Food Tax, Betting Tax and Plastic Bag tax. This comes after the government also introduced wealth tax, and sugar tax, making Zimbabweans one of the highest taxed people in the world.
Overtaxing a nation can have negative consequences as people will begin to think on ways to evade paying taxes. It can also make a nation less competitive in the global market, potentially leading to reduced foreign investment.”
Dzimiri added:
“Excessive taxation can also limit individual freedom and choice, as people have less disposable income to make their own decisions. Ultimately, high tax rates can cause brain drain as it drives talented individuals to seek opportunities in lower-tax countries
“Secondly, pension schemes both private and public will be affected as every employee whose contract is terminated will look up to government for social welfare but resources are scarce at the moment. Lack of access to social protection and benefits usually associated with full time employment leave employees vulnerable and dependant on the already strained public service provisions.”
Dzimiri said if the retail sector collapses, that will result in smuggling of counterfeit goods into the country.
“If supermarkets are allowed to collapse, it will encourage more informal business that do not pay taxes as well as smuggling of counterfeit goods. It is the country as a whole that losses out,”he said.
Some companies such as Ok Zimbabwe, Choppies, TM Pick and Pay and Food World have closed some shops citing among other issues, unfair competition as consumers are now purchasing cheaper goods from the informal sector.