The Zambian government has been urged to promote small and medium enterprises (SMEs) so as to broaden the tax band of the country, Times of Zambia reported Monday.

Zambia Chamber of Small and Medium Business Enterprises (ZCSMBA) executive director Max Sichula was quoted as saying in Lusaka that the tax band will only be broadened once the small and medium enterprises are helped to graduate into businesses capable of contributing to the national treasury.

He told the newspaper at the weekend that the only way to ease tension on the tax band is to help SMEs graduate from informal to the formal sector.

There are thousands of SMEs in the country but only 370 of them have registered with Small Enterprises Development Board in the last three years, he said.

"These SMEs, if registered, could contribute to the national economy through paying tax, but they are not doing so because they are still in the informal sector. The challenge is how to graduate them from the informal to the formal sector," he said.

Current statistics on SMEs indicate that 48 percent are engaged in trading, 18 percent in manufacturing, 11 percent in tourism, four percent in food processing, while one percent in the construction industry.

"It is not good for a growing economy to have 48 percent SMEs in the trading sector, trading will not take us anywhere. We must ensure additional value to our goods by venturing into manufacturing," he observed.

Sichula said SMEs, which need financial support to be able to expand their businesses, face hurdles which make it almost impossible for them to access funds.

He said with the government help ZCSMBA will attempt to get SMEs organized through policy review.

Sichula also said apart from the difficulties to access financing, SMEs also lack management and technical skills.

Source: Xinhua