Zimbabwe may suspend plan to restrict informal trade, raise VAT
Zimbabwe may suspend a move that forces businesses to procure goods from tax compliant and licensed entities, the Confederation of Zimbabwe Industries said in a note to members.
Sekai Kuvarika, chief executive officer of the industry lobbying group, met with government officials on Saturday to discuss the measures, which came into effect on Jan. 1. Businesses are now expected to buy from registered organizations and cut out middlemen.
“The government has provided a moratorium so businesses can continue to trade on the basis of December 2023 conditions while the engagements are being finalized,” Kuvarika said in the circular.
Other issues raised at the meeting include market access, value added tax policy, Zimbabwe’s sugar tax on beverages, and the 10% margin on the exchange rate for formal businesses.
CZI represents some of Zimbabwe’s biggest entities including beverage manufacturer Delta Corp Zimbabwe and OK Zimbabwe, the African nation’s largest retail operator.
Calls to the office of finance minister Mthuli Ncube weren’t immediately answered outside of regular business hours.
The new regulations effectively resulted in the removal of VAT exemptions on certain basic food commodities, including bread and meat, which will force consumers to pay an extra 15% for groceries.
Some products are exempted from VAT, including agricultural inputs, gasoline, medicine and medical services, wheat, milk and salt.
