THE government has imposed a 15% value-added tax (VAT) on all meat products and cereals, in a move likely to trigger a sharp increase in the prices of most basic foodstuffs, as retailers are likely to pass on the cost to end users.
Source: Govt imposes 15% VAT on meat, cereals – NewsDay Zimbabwe February 1, 2017
BY BLESSED MHLANGA
The new tax regime, which becomes effective today, was introduced by Finance minister Patrick Chinamasa under Statutory Instrument (SI) 20 of 2017 and affects all meat products — including offals and fish — rice, maheu and margarine.
Previously, products such as rice, fish and meat were exempt from the 15% VAT, which has largely made the prices of these basic commodities relatively cheap and affordable for low-income earners.
The SI effectively lifts the tax exemptions on most meat products and cereals.
Zimbabwe Congress of Trade Unions secretary-general, Japhet Ncube condemned the move, saying it was illogical for the government to impose additional taxes on basic commodities at a time salaries were stagnant, with most families struggling to put food on the table.
“It is a very sad situation that the government has seen it prudent to tax basics, which the majority of our people survive on, especially at a time wages and salaries have not been increased in a very long time. They could have looked at other luxury products like cars, beer and cigarettes, instead of taxing basic commodities,” he said.
Opposition MDC-T spokesperson, Obert Gutu, said the imposition of VAT on basics commodities confirmed the notion that the Zanu PF government was “anti-people”.
“The Zanu PF regime has a sordid and cruel reputation of being anti-people. This regime takes a special kind of pleasure in seeing the majority of the people suffer. SI 20 of 2017 is meant to extort more taxes from the already overtaxed, poor and struggling consumer. This regime is desperate to raise money using both conventional and unconventional methods,” he said.
Gutu said President Robert Mugabe’s government was broke and had run out of ideas to save the collapsing economy.
“The Zanu PF regime is bankrupt and they are now scrounging all over to raise money to pay for Robert Mugabe’s extravagant and wasteful lifestyle. It’s just a matter of time before this regime completely fails to pay civil servants their monthly salaries,” he said.