The Confederation of Zimbabwe Retailers (CZR) has condemned the Zimbabwe Revenue Authority (ZIMRA)’s persistence to collect VAT on rice claiming that it is promoting policy inconsistency and threatening the business sector’s contribution to the development of the country’s economy.
This follows ZIMRA’s recent move insisting to collect Value Added Tax (VAT) on rice packages of 25kgs and below backdated to February 2017, highlighted in the media recently. However, according to CZR the move is against the VAT exemption for rice set out in Statutory Instrument (SI) 9 of 2016.
Although it was amended by SI 20 of 2017 with effect from February 1, 2017 its position that all rice (including pre-packed rice in packages or less than 25kg) was VAT exempt was later restored by SI 26A of 2017 published on February 16, 2017 repealing SI 20 of 2017.
In a press statement yesterday CZR through its president, Mr Denford Mutashu stated that ZIMRA’s move is illegal and that it imposes serious implications on the country’s low income families who will not be able to afford the basic commodity.
Since the unceasing increase in the prices of the country’s goods and services in 2018 due to hyperinflation, rice has been among other affordable basic commodities such as maize meal that a lot of people have been relying on.
Mr Mutashu noted that ZIMRA’s decision will also affect the country’s policies and business sector.
“The decision by ZIMRA lays bare the need for policy consistency, ZIMRA was quiet for 3 years, not indicating that VAT was to be collected on rice and it is only recently that it has sought to collect the VAT which was previously and still is exempt.
“We wish to point out that it is an established principle of law that no tax can be imposed on a party, unless the same is clearly set out in legislation and at present, the law is that rice is exempt from VAT and even the ZIMRA system has not been and is presently not charging VAT.
“Effecting the decision is not only a violation of property rights but a direct act on any confidence the business sector had in the economy and we believe that for this economy to attract both local and foreign investment there is a need to have the respect for the rule of law and policy consistency. As CZR, we state unequivocally that the VAT directive undermines President Mnangagwa’s pro-business stance enunciated by the ‘Zimbabwe is Open for Business’ mantra”, he stated.
Meanwhile, CZR assured the nation that it will continue engaging the Government on the issue to ensure that all stakeholders comply, “with the law for the benefit of the country”.