Zimbabwe’s economy is going through a rough patch, including shortage of the recently introduced bond notes and foreign currency, and any measures that disrupt a few streams that bring the much needed hard currency should not be tolerated.
It is our humble submission that whenever Government, through the Zimbabwe Revenue Authority, wants to introduce economic regulatory measures, it has to consider the timing.
Poor timing and lack of consultation in many occasions result in a noble policy at times being demonised.
Yes, we agree that all Zimbabweans, farmers included, and even those in the informal sector, should pay tax that should be channelled towards key Government obligations such as infrastructure development and acquisition of essential drugs for hospitals.
But zimra’s introduction of a tax in terms of Section 80 (2) of the Income Tax Chapter 23:06 that entails all farmers to pay 10 percent withholding tax if they have not presented a valid tax clearance certificate, was a clear sign of a rushed thought.
The question is: why is it that the decision was announced after the opening of the marketing season for tobacco when farmers had already started planning without the new tax in mind?
Surely, someone went to sleep and only realised at the last minute that the law would be used to collect money from farmers.
We are, therefore, hopeful that the Minister of Agriculture, Mechanisation and Irrigation Development Dr Joseph Made will today announce a package that is going to be accepted by all stakeholders in the farming business.
Minister Made, who from the onset was not supportive of the tax, met Finance and Economic Development Minister Patrick Chinamasa recently to try and resolve the disenchantment among farmers caused by the introduction of the 10 percent tax.
Zimbabwe Revenue Authority (zimra) last week effected the tax on farmers without valid clearance certificates and this was supposed to start on March 31.
However, farmers were not happy with the proposed tax that has not yet been effected, but continued to deliver their crop to the floors, anticipating a positive outcome today.
Zimbabwe Farmers’ Union president Mr Wonder Chabikwa should be commended for stating it categorically that zimra had the mandate to collect revenue, but the imposition of the 10 percent tax was going to affect most small holder farmers and also bring back middlemen to the tobacco sector.
He was quoted; “The timing of the tax was not good. The Reserve Bank of Zimbabwe had introduced a five percent export incentive facility to motivate farmers to improve on quality and quantity of the crop, but the introduction of the 10 percent tax will erode all these efforts.
“The tobacco sector is one of the lucrative sectors and such moves may destroy the industry. It does not help to kill the hen that lays the golden eggs.”
Tobacco is an important crop in Zimbabwe and has helped to enhance the livelihoods of thousands of farmers across the country and earns 30 percent of the country’s foreign currency, bringing in over $800 million.
But still, our farmers should be subjected to taxation like any other Zimbabwean worker and we hope the tax man will find acceptable ways to deal with this matter.
What is important is not to disrupt the tobacco selling season and we do not want to wake up to reports of farmers protesting against the imposition of such a huge tax.
We believe that tobacco farmers are reasonable enough to accept a form of a tax, considering that it leaves them being able to make ends meet.
Something at 5 or 6 percent of the gross income earned may leave the farmers still smiling all the way to the bank.