Business engages Govt

LIVINGSTONE MARUFU

Business executives intend to discuss with the government several statutory obligations that are burdening the already-squeezed industry, such as the fuel levy, the intermediated money transfer tax (IMTT), and toll fees, Business Times can report.

The drive follows the U-turn on certain levies made by Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube on Tuesday, in response to industry protests following a fresh round of price hikes.

“Firstly, I would like to thank  Minister Ncube for listening to the industry following protracted engagements since the beginning of the year.

“We are happy that most of our input was used to reverse what we thought could hurt the business,” the Zimbabwe National Chamber of Commerce president Mike Kamungeremu told Business Times.

He added: “But we  continue to engage the government on some statutory obligations like fuel levy,  Intermediated money transfer tax [IMTT] and toll fees  which are burdening the already squeezed industry.

“We would like the government to reduce taxation burden to the complying businesses as this is pushing up cost of production resulting in expensive products in shelves.”

Kurai Matsheza, the Confederation of Zimbabwe Industries, stated that the Treasury listened to the industry’s plea to prevent shortages and excessive costs.

“We are happy that the Minister answered our calls as  the industry and reversed majority of statutory obligations which we thought could harm businesses.

“Now that we have made some successful engagements with the government. We are now moving to the next block of taxes to ensure we are not burdened by the cost complying.

“We are very much aware of the effects of the fuel levies, toll fees and sugar tax among others but we are engaging the authorities to see if there could be some adjustments,” Matsheza said.

According to Professor Ncube, the Treasury established a Technical Committee to hear opinions from Representative Members operating under the CZI’s auspices.

“The Committee undertook an impact analysis on the implementation of some of the measures introduced through the 2024 Budget, in particular with regards to tax compliance on route to the market, mitigation of consequences of the sugar on health through a special surtax, and a few tariff lines that were omitted on exemption from Value Added Tax, in order to cover the whole value chain that includes cotton and soya seeds to cooking oil.

“Findings of the Committee have been presented; hence, Treasury advises on the following fine tuning of the prevailing measures that are enshrined in the Finance Act and subsidiary legislation as follows: Route to Market,” he said.

Professor Ncube added: “Taking into consideration the need to preserve some of the pertinent arrangements for delivery of goods into the market efficiently, the legislation will be fine-tuned as follows: Retailers can purchase from manufacturers as long as they have obtained a valid Tax Clearance Certificate, and are VAT registered.

“Manufacturers are permitted to sell to institutions such as hotels, schools and other corporates, provided such clients are registered for VAT and possess a valid Tax Clearance Certificate.”

He said in order to protect the quality of goods and safety of consumers, perishable products that include bread and milk products will be distributed by manufacturers directly to retailers.

Professor Ncube acknowledged that a concern was raised with regards to survival of the rural traders, since they are not registered for tax purposes.

“These traders will however, continue to purchase their goods from the wholesalers, hence there will not be affected by the disruption of trade.

“Manufacturers will also supply direct to small traders in the rural areas; where the manufacturer distributes directly to customers who are not registered for VAT, are not in possession of a valid VAT certificate and also not registered for Income Tax purposes, a 5% Withholding Tax shall apply,” Professor Ncube said.

Basic food items that include bread, milk, cooking oil, mealie meal, salt, sugar, flour, are exempt from Value Added Tax purposes, hence government called for no price increases.

Treasury added that  basic commodities that include meat, rice, bath and laundry soap, washing powder, toothpaste and petroleum jelly have been moved to standard rating, hence, price increases should be minimal.