By Nomalanga Makwelo
The Confederation of Zimbabwe Retailers have challenged the Minister of Finance and Economic Development’s directive which allows the Zimbabwe Revenue Authority(ZIMRA) to collect Value Added Tax ( VAT ) on rice sales .
Government insists on collecting a 15% value-added tax (VAT) on rice packages of 25kg and below backdated to February 2017. Appeals made early last year for government to reconsider the VAT were rejected by Finance Secretary George Guvamatanga who noted the justification given for failure to charge and remit VAT as well as industry concerns over the financial burden that may result from collection of the outstanding taxes.
Speaking to Skyz Metro FM news , President of the Confederation of Zimbabwe Retailers Denford Mutashu ,said that they were against Professor Ncube’s decision as it infringed upon consumers and the business community’s rights.
” We note their position that the exemption on VAT in respect of rice was restricted to rice in packages of 25kgs or more , as well as broken rice but respectfully disagree with that position.”
Mutashu stated that by giving ZIMRA the go ahead to collect the VAT on rice,the minister was going against President Mnangangwa ‘s business mantra as well as the trajectory of the private sector led economy in which they all aspire to.
Mutashu indicated that they have written to the Presidential office , seeking a revision on the decision as it would also bring a huge burden on the public, who are the consumers as they are the ones who will pay the tax.
” It is our position that the promulgation of SI 26A of 2017 had three effects on rice VAT status . The first effect was to repeal SI 20 of 2017 . The second effect was to add more rice on the exemption list from zero rated category . The effect of the repeal of statutory instrument was to take back rice to SI 9 of 2016. ”
In terms of the law, ZIMRA is collecting the tax at a standard rate subject to VAT at the rate of 14.5% for current sales and 15% for sales done before January 2020 on rice with effect from February 16, 2017.