HomeNewsGovt to review duty on raw materials

Govt to review duty on raw materials

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The government is working on recommendations from companies to consider reviewing duty payable on raw materials and finished products, a Cabinet minister said on Wednesday.

The recommendations are set to be incorporated in the 2012 National Budget to be presented later this month.

In recent months, companies have been lobbying the government to have a relook at the issue of charging duty on raw materials.

Industry and Commerce minister Welshman Ncube on Wednesday said the government was dealing with the matter.

“We have made recommendations to Cabinet on duty on raw materials and finished products. That is work in progress. We will speedily do our work in view of the budget presentation,” said Ncube.

According to a manufacturing survey released by Confederation of Zimbabwe Industries (CZI) prices of sourcing raw materials increased between June last year to June this year.

The costs of local raw materials is said to have increased by 7% while that of imported raw materials doubled.

“There has been a decline in the supply of raw materials both local and imported. Locally sourced materials supplies declined by 8% from the second half of 2011. Imported raw materials are estimated to have decreased by 57%.”

The survey shows companies are facing problems of the unavailability of raw materials as a result of the high costs.

Production volumes for the period under review have been on a growth in the past three years.

“The rate of increase has decelerated, with 2011 recording a percentage increase of 14% compared to 34% recorded over the same period in 2010,” the survey said. CZI president Joseph Kanyekanye in July this year, urged the government to remove duty on raw materials to assist companies recover and increase output as it was unsustainable for business.

“Raw materials are coming into the country with duty and value added tax up to 30%, while finished goods are coming in at zero percent,” he said.

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