Millers and retailers’ groups have summoned Finance Minister Mthuli Ncube to a meeting to iron-out the ongoing feud sparked by government’s demand for Value Added Tax (VAT) on rice imports dating back to 2017.
The government directive has since been dismissed by the Confederation of Zimbabwe Retailers (CZR), which said it showed lack of policy consistency and violates earlier exemptions granted by then finance minister, Patrick Chinamasa three years ago.
Under the new government measures, rice packages of 25kg and below are exempted from tax payment.
However, the millers and retailers maintain no tax can be imposed on a party unless the same is clearly set out in a legislation.
They highlighted under the current laws, rice is exempt from VAT and even the Zimbabwe Revenue Authority (ZIMRA) has not been not charging tax.
But Treasury is contradicting the retailers’ position on the basis the exemptions saying these were aimed at supporting the local packaging industry through promoting repackaging of cheaper bulk rice into smaller units.
It argues the legislation which gave effect to the new measures was promulgated timeously adding taxpayers had the opportunity to seek clarity or raise concerns over any omissions with Treasury.
In a statement, Grain Millers Association of Zimbabwe (GMAZ) acting general manager, Garikai Chaunza said his association and the CZR needed an urgent meeting with Ncube.
“We have jointly requested an urgent audience with the Minister of Finance Economic Development, Prof Mthuli Ncube, to discuss and conclude the contestations arising from the recent ZIMRA’s administrative decision to back date VAT on rice,” he said.
Chaunza expressed optimism the discussions will be successful and issues raised will be solved amicably.
“In the meantime, we kindly encourage our membership to wait for the outcome of these discussions and refrain from litigation.”