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Retailers seek tax exemption on rice

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RETAILERS and suppliers have approached Vice-President Constantino Chiwenga’s office seeking exemption from paying value-added tax (VAT) on rice.

BY KENNETH NYANGANI

Government recently ordered them to pay VAT on rice backdated to three years ago.

Industry operators have warned that the move would affect ordinary citizens as that would push the price of the staple food beyond the reach of many.

Former Finance minister Patrick Chinamasa had in the 2017 national budget statement announced a tax waiver on rice.

Confederation of Zimbabwe Retailers Association boss Denford Mutashu told NewsDay that his organisation was now engaging the government over the issue.

“We are at an advanced stage deliberating on the matter, and we have engaged the Industry and Commerce and Finance and Economic Development ministries on the matter and discussions are ongoing,” Mutashu said.

“We have received good feedback from the government. As retailers, we are affected by the VAT charge which was announced by Zimra (Zimbabwe Revenue Authority) through a statutory instrument. But the other good thing is that VP Chiwenga has given us positive feedback as he is looking into the matter,” he said.

Chairman of the Confederation of Zimbabwe Industries committee on trade development Henry Nemaire said the VAT was ruining the rice industry.

“The VAT charge surely will ruin the industry as amounts they want runs into millions of dollars. This will affect people at the grassroots, for example, old people in Mbare,” Nemaire said.

In a letter dated October 22, 2020 directed to Delloitte and Touche, Finance ministry secretary George Guvamatanga said the reintroduction of VAT on rice was meant to support local packaging industry through promoting repackaging of cheaper bulk rice into smaller units.

“Furthermore, legislation to give effect to the measure was promulgated timely and tax payers had an opportunity to seek clarity or raise concerns over any omissions with Treasury. In view, of the above, your request for a retrospective exemption of rice in packages of 25kg or less is therefore rejected, and your clients should approach Zimra for payment plans,” Guvamatanga said in the letter.

Zimbabwe consumes about 200 000 tonnes of rice per annum. It is one of the affordable basic commodities given the hike in bread prices.

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