Tobacco Sales Increase Slightly After Removal Of 2% Tax

5 years agoTue, 02 Apr 2019 11:40:31 GMT

Tobacco Sales Increase Slightly After Removal Of 2% Tax

A Herald article suggets that tobacco sales have slightly increased following the scrapping of the 2% tax from all tobacco related transactions. Finance and Economic Development Minister, Professor Mthuli Ncube, intervened following tobacco stakeholders’ call for exemption from the two percent tax.

The tax effected a farmers’ and Government confrontation. Farmers withheld their crop due to low process and regulatory issues.

Ncube announced the Government Statutory Instrument 80 of 2019, which amended the Finance Regulations of 2019. The SI scrapped the tax from all transactions for the purchase of auction tobacco. He said:

It is hereby notified that the Minister of Finance, has in terms of Section 3 of the Finance Act made the following regulations; the thirtieth schedule (Intermediated Money Transfer Tax) in the Income Tax (Chapter 23.06) is amended in paragraph 1.
The transfer of funds for the purchase of auction or contract tobacco from buyers or contractors to auction floors and the transfer of funds by contractors and auction floors to growers of tobacco for deliveries of tobacco.
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Some farmers who spoke to the Herald yesterday revealed that scrapping of the tax stimulated an increase in volumes of sales. Rusape farmer, Mr Tongai Muchemenyi, said that it seems all systems are now in place although prices are still low.

Meanwhile, tobacco sales have continued to increase although they are still below the volumes sold during the same period last year.