Finance and Economic Development Minister Mthuli has proposed to raise value-added tax (VAT) from the current 14.5 percent to 15 percent with effect from 1 January 2023.
Presenting his ZWL$4.2 trillion (about US$6.5 billion) budget on Thursday, at the new Parliament building in Mt Hampden, near Harare, Ncube said on average, SADC countries charge 16 percent VAT. He said:
Zimbabwe charges a comparatively lower rate of 14.5 percent. The VAT rate was reduced from 15 percent with effect from January 1, 2020, in order to support households during the peak period of the COVID-19 pandemic… I propose to reinstate the VAT rate to the previous rate of 15 percent with effect from January 1, 2023.
Consumers pay VAT when they buy food, and pay for water, electricity, and other services.
Ncube also removed the suspension of duty on basic food items such as rice, maize meal, bath soap, cooking oil and maize meal amongst others. He said:
The suspension of duty, which expired on November 16, 2022, will not be extended.
The government will, however, monitor prices of basic commodities with a view to ensuring responsible pricing and affordability, failure of which the suspension will be reinstated.
Ncube, however, said he was reducing the Intermediate Money Transfer Tax (IMTT) on domestic foreign currency transfers from 4 percent to 2 percent.
Meanwhile, former Finance Minister Tendai Biti described the restoration of duties on basic commodities particularly while approaching a festive season as “equally sadistic and bankrupt.” | ZimLive