The Zimbabwe National Chamber of Commerce (ZNCC) has urged the Finance and Economic Development Ministry to adjust the cigarette tax regime.
This comes amid indications that the country is losing US$248 million annually to illicit cigarette deals owing to a mixed taxing regime that benefits cartels at the expense of industry players.
Finance Minister Mthuli Ncube recently increased excise duty on cigarettes to 25% + US$5/1000 from 20% + US$5/1000 cigarettes saying it was a regional benchmark and the move will curb illicit flows.
In its latest report, the Zimbabwe National Chamber of Commerce (ZNCC) implored Treasury to do away with the ad valorem rate of 25% and remain with the specific rate. It said:
<blockquote>
We request that the Ministry of Finance and Economic Development remove the ad valorem rate of 25% and remain with the specific rate of US$16 per mile of cigarettes.
The ad valorem component is subject to manipulation and is a huge cost as production increases.
The estimated fiscal benefit from this proposed move is US$248m per annum based on the current production rate and the prospects of future production once it is removed.
We also strongly urge the Ministry of Finance and Economic Development to put in place a predictable cigarette excise duty regime.
</blockquote>
The Confederation of Zimbabwe Industries (CZI) also called for the removal of the current mixed excise duty on cigarettes. CZI said:
<blockquote>
CZI recommends that there is a need to migrate from the current mixed excise duty regime for tobacco to a specific excise duty regime, which brings certainty to investors while also maintaining revenue inflows for the government as well as eradicating illicit cigarette markets.
The current ad valorem excise duty is prone to manipulation by cigarette companies through falsification of ex-factory prices or controlling sales transactions with third parties so that the ex-factory price is lowered to reduce the excise amount.
</blockquote>
Meanwhile, ZNCC has called on the government to provide tax relief to the sector as the wider economy recovers from the COVID-19 pandemic. | <a href="https://businesstimes.co.zw/zim-loses-us248m-to-illicit-cigarette-deals/">Business Times</a>

Pindula News

Zimbabwe Loses US$248 Million To Illicit Cigarette Deals

A police officer was killed on Saturday morning at a hotel bar in Figtree while reportedly trying to end a misunderstanding between a patron and a bartender.
Zimbabwe Republic Police (ZRP) national spokesperson Assistant Commissioner Paul Nyathi identified the victim as Detective Sergeant Lovedany Madambi (39).
Asst Comm Nyathi said Madambi was stabbed to death with an unknown object by one Mthulisi Moyo (25). Said Nyathi:
<blockquote>
I can confirm one suspect Mthulisi Moyo aged 25 years has been arrested in connection with the murder of a police officer, Detective Sergeant Lovedany Madambi which occurred at the hotel bar in Fig tree which occurred on the 8th of October 2022 around 2 AM.
The victim had reprimanded the suspect for pestering the bar attendant to sell him cigarettes after the bar had closed for the day.
</blockquote>
Asst Comm Nyathi said the suspect has since been arrested.
In an unrelated case, police said they are investigating a murder incident which occurred in Ngundu, Chivi, on 22 September 2022 at 1.30 PM.
Police said two grade one pupils aged seven and six reportedly fought over a pencil on their way home from school resulting in one of the pupils sustaining severe injuries.
The injured pupil succumbed to the injuries on 05 October 2022, police added. | <a href="https://cite.org.zw/police-officer-fatally-stabbed-while-trying-to-break-up-bar-fight/">CITE</a>

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