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Grain millers urge official repeal of VAT on foodstuffs

THE Grain Millers’ Association of Zimbabwe (GMAZ) yesterday said Statutory Instrument (SI) 20, which imposed 15% value-added tax (VAT) on cereals and meat products and became effective at the beginning of the month, has negatively affected businesses with sales drastically plummeting by at least 15%.


GMAZ chairperson Tafadzwa Musarara

GMAZ chairperson Tafadzwa Musarara

GMAZ chairman, Tafadzwa Musarara pleaded with the Christopher Chitindi-led Parliamentary Portfolio Committee on Lands and Agriculture to put pressure on the government to speedily gazette another statutory instrument to reverse SI 20, which remains effective.

Finance minister Patrick Chinamasa last week issued a ministerial statement in the National Assembly announcing the shelving of SI 20, but prices of the affected products such as rice, potatoes and meat have yet to be reduced in the absence of appropriate legal provisions.

“We urge the committee to do everything in its powers to push for the repeal of SI 20 because if you put 15% VAT on potatoes, rice and meat, it makes it difficult for farmers to be also charged VAT as it is an additional cost,” Musarara said.

“There was mention that SI 20 had been shelved, but we continue to charge VAT because another statutory instrument to reverse that decision has not been made in black and white and on paper.”

He said consumption of agricultural products, such as rice, had gone down because of the extra cost of the 15% VAT. The GMAZ boss said rice was now one of Zimbabwe’s staple foods, as national consumption of the cereal grew from 50 000 metric tonnes in 2007 to 200 000 metric tonnes in 2016.

Musarara urged the committee to put pressure on the government to protect the local milling industry by banning imports of flour. He said the 38 milling companies in the country could produce 130 000 tonnes of floor per month against the monthly requirement of 30 000 tonnes.

“On wheat, the industry invested $20 million in tooling, repair and rehabilitation of equipment and we produce quality products, which compare favourably in the international market. However, the challenges are for millers to obtain nostro (foreign currency) account support to import raw materials for flour,” he said.

GMAZ deputy chairperson, Thembinkosi Ndlovu, said some people were fraudulently importing cheap maize, including genetically modified products, and repackaging it.

Musarara said GMAZ was prepared to take in 800 000 metric tonnes of maize and more than 100 000 metric tonnes of wheat from farmers, as a bumper harvest was expected in the country due to favourable rains.

He called for stiffer penalties on abusers inputs.

Graeme Murdoch, chairperson of the Grain and Oil Seed Traders’ Association of Zimbabwe, said viable and realistic pre-plant prices must be announced to farmers before they begin winter wheat farming.

Tanzanian Blue Ribbon Foods investor, Yusuf Kamau said Zimbabwe needed to reduce its high cost of production to be able to export.

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