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Millers call for VAT exemption on rice imports


THE Grain Millers’ Association of Zimbabwe (GMAZ) has called on the government to reconsider its decision to impose value-added tax (VAT) on imported rice, saying it will affect the country’s nutritional needs and affect companies that had invested in repackaging of the commodity.


GMAZ chairperson Tafadzwa Musarara
GMAZ chairperson Tafadzwa Musarara

GMAZ chairperson, Tafadzwa Musarara recently wrote to Finance minister Patrick Chinamasa asking for the extension of VAT exemption that was brought by Statutory Instrument 9 of 2016, arguing that a tax will force an increase in the cost of the product to the consumers.

“An increase in price will regrettably trigger a decline in demand of about 40% from the 200 000 metric tonnes consumed annually. The current consumption levels account for over 10 000 jobs of direct and indirect employees, who will undoubtedly be severely affected,” he wrote.

“Companies in the pre-packaging industries have invested more than $8 million in retooling in the past six years and a decline in consumption of rice will be unviable to investment.”

GMAZ said it was not consulted about the reintroduction of VAT on rice imports, arguing its continued importation did not harm any farmers, as there is no rice production in the country.

“The industry was not consulted on this particular matter. Further, there is no rice farming in Zimbabwe that is being prejudiced by the importation of rice and continued suspension of VAT on rice causes no harm to our economy,” the letter further read.

The association noted that rice has grown to become the second staple food after maize, considering that the publics that consume rice includes boarding schools, tertiary institutions, work canteens, restaurants and several households.

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