Harare – The Confederation of Zimbabwe Retailers (CZR) has written to the government appealing for the swift implementation of the zero-rating of Value Added Tax (VAT) on essential goods, as approved by Cabinet.
The letter is a follow-up to a letter dated May 6, 2024, titled ‘Drought Preparedness: Zero-Rating of Rice a Critical Imperative,’
The letter addressed to Minister of Finance and Development Prof Mthuli Ncube stressed the urgent need to implement the Cabinet’s decision on Monday, May 12, 2024, to remove Value Added Tax (VAT) on rice and potato seeds.
“We respectively request your urgent intervention to ensure a swift implementation of zero-rating VAT on, in line with Cabinet’s approval,” said CZR president Denford Mutashu
He further added that local retailers are struggling to face competition with smuggled rice imports, mainly from South Africa and this surge in smuggled goods not only threatens the availability of legitimate rice but also risks long-term financial losses for the government
The removal of VAT on rice levels the playing field for local retailers and reduces the appeal of smuggled goods.
“We are increasingly concerned that, to date, the VAT on rice has not been removed. This delay has impacted retailers as they struggle to compete with smuggled rice imports, particularly from South Africa. The influx of smuggled goods is not only diminishing the availability of legitimate rice volumes in our markets but is also likely to have long-term negative consequences for the fiscus, resulting in losses across various tax heads,” said the letter
In his letter Mutashu highlights that smuggling isn’t just affecting the rice industry; other products like washing powder and second-hand clothing are also being heavily impacted.
The influx of illicit goods is threatening the local market, making it difficult for legitimate businesses to compete.
