LIVINGSTONE MARUFU
The decision by government to order retailers to pay Value Added Tax (VAT) on rice for the period backdated to 2017 has sparked outcry with the Consumer Council of Zimbabwe (CCZ) describing the move as a plot to burden further the long-suffering consumers.
Retailers, CCZ said, would in turn push the burden onto consumers.
Last week, the Finance and Economic Development Minister, Mthuli Ncube, upheld an earlier pronouncement that gave the Zimbabwe Revenue Authority (Zimra) the power to collect VAT on rice in retrospect.
Retailers had approached the Treasury seeking exemption from paying VAT on rice packages of 25 kilogrammes or less. The matter has since spilled into the courts.
CCZ acting executive director Rosemary Mpofu told Business Times that the government should consult when coming up with such policies.
“We know that all businesses should pay taxes at any given time as the country relies on tax to fund its expenditures but the payment of tax should be done at that given time. This idea of asking retailers to pay in retrospect will only affect the consumer as the retailer will increase the prices of basic commodities to raise those funds,” Mpofu said.
She added: “Consumers do not have strong spending power due to Covid-19 induced lockdowns which restricted the movement of people hence it is only a burden to someone who is struggling to make ends meet.”
The Confederation of Zimbabwe Retailers (CZR) is not happy with the move by the government.
CZR president ,Denford Mutashu told Business Times this week that the decision was undermining the need to foster property rights and the ‘Zimbabwe is open for business’ mantras enunciated by President Emmerson Mnangagwa.
“Ncube’s directive is unfortunate and has shocked the entire business community some of whom now doubt the commitment by the government towards ease of doing business. Most businesses will shut down once ZIMRA goes ahead to collect VAT from retailers,” Mutashu said.
He added: “We have elevated the matter to His Excellency President (Emmerson) Mnangagwa and Hon Vice President Constantino Chiwenga and hear what the leadership has to say on the matter.”
CZR said such draconian policies affect business confidence and the Treasury should always strike a balance between revenue collection and business survival.
