The Grain Millers Association of Zimbabwe (GMAZ) has urged Finance, Economic Development and Investment Promotion Minister Mthuli Ncube to reverse a 15% Value Added tax (VAT) introduced earlier this month saying the tax will push up the price of rice.
Ncube announced Statutory Instrument 15 of 2024 on 09 February.
In a statement, GMAZ President Tafadzwa Musarara also said the 15% VAT will result in untaxed rice processed in South Africa flooding the Zimbabwean market. Said Musarara:
An imposition of VAT will increase the costs of 2kg rice from US$2.00 to US$2.30 or US$2.40.
Due to change complications, some retailers may end up pricing the same at US$3.00. This will weigh down heavily on consumer spending.
Rice in South Africa is VAT free and will land in Zimbabwe cheaper than locally-processed rice.
The local market will soon be dominated by prepacked rice imports putting in danger 2,800 local workers in the rice sector and also the massive infrastructure will be made redundant.
Consequently, government will not earn the intended revenue. We anticipate that VAT collection to be low, and the fiscus will lose employment related tax revenues due to the job losses.
He said rice is the second most preferred food in Zimbabwe with a monthly consumption of 15 000 metric tonnes, and expected to rise to 22 500 by 2028. Said Musarara:
Rice has favourable nutritional content than maize-meal as it is low in fat, cholesterol free and high in fibre.
It has a lower glycaemic index compared to maize-meal, thus keeping blood sugar more stable compared to maize meal.
This attribute is critical in the country’s fight against non-communicable diseases such as sugar diabetes.
Rice is gluten-free and ideal for persons with gastrointestinal health challenges.
Zimbabwe has experienced wave after wave of price increases since the start of the year as a raft of tax measures introduced by Treasury in the 2024 National Budget kick in.
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