ZMX pushes for tax incentives to unlock value for farmers

SAMANTHA MADE

Zimbabwe Mercantile Exchange (ZMX) has called on the government to introduce targeted tax incentives to accelerate the adoption of warehouse receipt systems, an intervention it says could unlock significant value for farmers and strengthen financial inclusion across the agricultural sector.

A ZMX warehouse receipt is a legally recognised document issued when a commodity holder deposits goods in an approved warehouse.

It serves as proof of ownership and enables farmers to use stored commodities as collateral for financing.

Presenting at the third Annual Financial Inclusion Conference, Collen Tapfumaneyi, founder and Group Chief Executive Officer of the Escrow Group, underscored the urgent need to remove key tax barriers that continue to discourage the use of warehouse receipts.

“We are appealing to the government to consider specific tax incentives to encourage the use of warehouse receipt activities. In particular, if we can remove IMTT tax from transactions involving the warehouse receipt, that would be of immense benefit,” Tapfumaneyi said.

He noted that government has already extended similar exemptions to the capital markets.
“Any transactions involving equities and stock markets are exempt from IMTT, and by the same principles, it should be possible to do this for the warehouse receipt system,” he said.

However, Tapfumaneyi warned that infrastructure gaps—most critically, the shortage of certified warehouses—remain a major constraint.

“In terms of what we are focusing on, one of the biggest challenges is the availability of certified warehouses, which are acceptable to farmers wherever they are,” he said, adding that additional interventions were required to expand storage capacity nationwide.

Beyond grains and horticulture, ZMX is now moving to operationalise the livestock warehouse receipt system, a development Tapfumaneyi said could unlock billions in value currently trapped in “dead capital”.

“We are also very passionate about operationalising the livestock warehouse receipt system. So, we have been talking about crops, grain, horticulture, but government has also allowed us to add livestock,” he said.

He explained that bringing livestock into the warehouse receipt framework could dramatically improve access to finance for small-scale farmers.

“Livestock that our farmers hold is worth probably three billion or so, and the bulk of it is in the hands of small-scale farmers, and if we introduce that to the warehouse receipt system immediately, we have farmers holding livestock, which is dead capital at the moment, becoming instantly financially included because that livestock becomes insured, and it becomes the collateral against which they can use to access production financing.”

Looking ahead, Tapfumaneyi said ZMX will prioritise four key success factors—strong partnerships, financial innovation, robust regulation, and building trust and transparency—to boost adoption.

“This will make our farmers feel comfortable being in the formal systems. They are a little bit reluctant. We talked about 5,400 against probably a million or two million farmers, so we still have a long way to go,” he said.