Mthuli Backtracks on VAT & Exempts Basic Goods
Retailers are now able to buy straight from manufacturers as long as they are VAT compliant
Mthuli Backtracks on VAT & Exempts Basic Goods
Treasury has fine-tuned some of the measures introduced through the 2024 National Budget, with basic food items such as bread, milk, cooking oil, and maize meal, exempted from Value Added Tax, eliminating the fears of price increases that had gripped consumers.
ZINARA Implements Mthuli's 100% Hike in Tollgate Fees
Other basic commodities such as meat, rice, bath and laundry soap, washing powder, toothpaste and petroleum jelly have been moved to standard rating, which means price increases should be minimal.
The measures were announced last night by Finance Minister Mthuli Ncube, following concerns that they could have unintended consequences.
He said the measures have been taken after Treasury constituted a technical committee to receive input from representative members under the umbrella body of the Confederation of Zimbabwe Industries (CFI).
The committee undertook an impact analysis on the implementation of some of the measures introduced through the 2024 Budget, in particular with regards to tax compliance en route to the market, mitigation of consequences of the sugar on health through a special surtax, and a few tariff lines omitted on exemption from Value Added Tax, in order to cover the whole value chain that includes cotton and soya seeds to cooking oil.
Mthuli Backtracks on VAT & Exempts Basic Goods
Ncube said the findings of the technical committee have since been presented, hence the decision by Treasury to fine-tune the measures enshrined in the Finance Act and subsidiary legislation.
Retailers are now able to buy straight from manufacturers as long as they have obtained a valid tax clearance certificate and are VAT registered.
And manufacturers have been allowed to sell to institutions such as hotels only if the clients are registered for VAT.
To ensure consistency in the cooking oil value chain, cotton seed and soya beans and its derivative products will be included in the VAT exemption schedule, while the Special Surtax on Sugar Content on specified beverages has been adjusted to US$0.001/gram and would be effective on the date of gazetting.
2024 Budget: Mthuli Rapped for Punitive Taxes
In terms of the route to market, Prof Ncube said taking into consideration the need to preserve some of the pertinent arrangements for delivery of goods into the market efficiently, the legislation will be fine-tuned in a way that allows retailers to purchase from manufacturers as long as they have obtained a valid Tax Clearance Certificate, and are VAT registered.
