Rice price expected to rise by 15% if Govt proceeds with the proposed re-introduction of VAT

Food processors yesterday said that the price of rice could rise by 15 percent if Government proceeds with the proposed re-introduction of Value Added Tax on the staple alternative. In the 2017 National Budget Finance and Economic Development Minister Patrick Chinamasa proposed recalling VAT on rice that was exempted by Statutory Instrument 9 of 2016.

This has prompted the Grain Millers Association of Zimbabwe, the representative body of grain processors to seek audience with Minister Chinamasa with a view to push for the continuation of suspension of VAT. In a letter dated December 20 2016 and seen by The Herald Business, GMAZ said:

A re-introduction of VAT will immediately trigger at least 15 percent price increase. This will no doubt, create inflationary pressures in the food chain. Given the current prevalent low incomes, consumers will not be able to sustain the price increase and will invariably cut down on consumption. We therefore respectfully plead for the continued suspension of VAT on all kinds of rice.

More: Herald


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