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Formalising informal sector can help tax collection – Nyumbu

GEMSTONE and Allied Workers Union general secretary Sifuniso Nyumbu says formalising the informal sector can help collection of more taxes and reduce child labour.

In an interview, Nyumbu said formalising the informal sector had become a global topic because it can help grow the economy of any country.

“When you are transitioning from the informal to the formal economy, most of the deprived income in terms of the national coffers is realised because informal sector participants move from individualism to cooperatives or even formation of companies which can be registered and PACRA realises income which is taxed,” Nyumbu said.

“And when they continue selling their products, since they are registered companies, ZRA [Zambia Revenue Authority] at the end of the day also realises something from the sales, meaning the tax base is broadened. And we have been singing this song for a long time, that let the tax base be broadened.”

Nyumbu said if not formalised, the informal sector would keep on propelling child labour.

“We have issues of child labour which are going to be combated also in informal sector. As long as there is existence of the informal economy, we are going to keep on experiencing child labour and it will keep on rising. With the cushioning of the informal sector, we can help get rid of child labour,” said Nyumbu.

The International Labour Organisation (ILO) working together with Zambia Congress of Trade Unions (ZCTU) held a two-day capacity building workshop on trade unions strategies for organising informal economy workers in Chisamba.

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