Six Months Ago Govt Re-imposed Duty On Basic Groceries
The recent move by the Government to suspend import duty and import value-added tax (VAT) on selected groceries is something Zimbabweans have become familiar with as it happened exactly 12 months ago.
The suspension was lifted in late November 2022, which means it has taken the Government just six months to reverse its decision amid soaring prices and a runaway exchange rate.
On Friday, 12 May, the Government suspended import duty and import value-added tax (VAT) on 11 basic grocery items: maize meal, rice, milk, flour, sugar, salt, cooking oil, petroleum jelly, toothpaste, bath soap and washing powder.
The suspension of the import duty and import VAT shall be valid for six months from 12 May 2023.
The development evokes a sense of déjà vu as similar measures to address rampant price increases were put in place in May 2022.
In May last year, Ministry of Finance and Development permanent secretary George Guvamatanga directed Zimbabwe Revenue Authority (ZIMRA) then acting Commissioner-General Regina Chinamasa to suspend duty on selected products for a period of six months with effect from 17 May 2022. Wrote Guvamatanga:
Reference is made to the press statement by the Minister of Finance and Economic Development where a pronouncement was made regarding the introduction of measures aimed at ensuring access to affordable basic commodities, in view of the recent substantial increases in prices of locally manufactured products.
In view of the above, Zimbabwe Revenue Authority is hereby authorised to suspend duty on the following products for a period of six months with effect from May 17, 2022.
Rice, flour, cooking oil, margarine, salt, sugar, maize meal, milk powder, infant milk formula, tea (whether or not flavoured), petroleum jelly, toothpaste, bath soap, laundry bar were to be imported duty-free.
Finance and Economic Development Minister Mthuli Ncube scrapped the suspension of import duty when he presented the 2023 national budget on 24 November 2022.
In his budget presentation at the New Parliament Building in Mt Hampden, Ncube said:
Mr speaker sir, the government suspended customs duty on basic commodities in order to cushion consumers from unjustified price increases, this measure has contributed to stability in prices of basic commodities, hence the suspension which expired on November 16, 2022 will not be extended.
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