Retailers have welcomed the scrapping of Value Added Tax (VAT) on pre-packed rice under Statutory Instrument 125 of 2021.
Retailers have been pushing for an exemption from paying the tax on rice packages of 25 kilogrammes or less, arguing that the decision to order them to pay VAT on rice undermined the “Zimbabwe is Open for Business” mantra.
Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu welcomed the removal of VAT on rice, saying the move will save jobs and prevent the informalisation of the economy. Said Mutashu:
We are pleased to note the publication of SI 125 of 2021 which specifically sets out that all rice is VAT exempt.
The confirmation of the VAT position for rice shows that the government is committed to establishing a private sector-led economy in line with the ‘open for business’ policy of His Excellency.
We want to thank President Mnangagwa, Vice President Constantino Chiwenga, the Minister of Finance (Mthuli) Ncube, the Minister of Trade and Commerce, Sekai Nzenza for listening to retailers and the public and addressing the matter.
Confirmation that pre-packaged rice is VAT exempt will save many jobs as well as prevent both the informalisation and de-industrialisation of the economy.
Meanwhile, Mutashu said there was still ambiguity as far as the effective date was concerned.
He said CZR would continue to engage the Ministry of Finance to address the ambiguity which has been created.
In March this year Finance and Economic Development Minister, Mthuli Ncube, announced that retailers were not exempt from paying VAT on rice.
Ncube had insisted that the Zimbabwe Revenue Authority (ZIMRA) should continue collecting VAT on rice for periods backdated to 2017.