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Government scraps VAT

Grace Kaerasora and Tariro Charandura
Government has scrapped the 15 percent Value Added Tax (VAT) on some basic commodities through Statutory Instrument 26A of 2017 which repealed SI 20 of 2017.  This has seen most retailers reducing prices of basic goods to the old pricing regime before the introduction of SI 20 of 2017, which added a 15 percent VAT on chicken, fish, pork, beef, mahewu, potatoes, margarine and rice.
According to the latest Government Gazette, the Minister of Finance and Economic Development Cde Patrick Chinamasa noted that, “The Value Added Tax (General) (Amendment) Regulations, 2017 (No.42), published in Statutory Instrument 20 of 2017, are hereby repealed”.
A snap survey conducted by The Sunday Mail yesterday showed that most retail outlets had reversed the increased prices.
Prices for basic products such as beef has been reduced to US$4, 99 from US$7, 65 per kg while a 2kg pack of chicken cost US$6,49 from US$8,95; a 5kg bad of mealie-meal was pegged at US$6, 27 from US$5, 73, 2kg and flour is now being sold for US$1, 95 from US$2, 25.
Consumers are paying US$0, 49 from US$0, 59 for a bottle of mahewu, 2kg rice is going for US$2, 49 from US$4, 80 and 500 grammes of margarine has been reduced to US$1 from US$1,05.
Confederation of Zimbabwe Retailers (CZR) president Mr Denford Mutashu said most retailers have since slashed prices.
“The directive (to reduce prices) is immediate and we are complying,” he said.
Meikles Mega Market general manager, Mr Panganai Ngorima, said they were complying with the new regulations.
Consumer Council of Zimbabwe (CCZ) executive director Ms Rosemary Siyachitema said the reduction of prices was a relief on consumers.
She said her council was yet to check whether retailers have reduced prices since some businesses claimed that they were yet to receive official communication on the scrapping of the 15 percent VAT.
“Sometimes we realise that retailers are quick to increase prices but take time to reduce, that’s poor treatment of customers,” she said.
University of Zimbabwe economics lecturer Dr Albert Makochekanwa said, “Most of these policies are two-edged swords where there are winners and losers. In this instance, Government wanted to increase its tax base or revenue, however, this had a negative effect on consumers.”

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