Zimbabwe's Fiscal Measures Increased Cost Of Doing Business, Says Tongaat Hullet

Tongaat Hullet has said Zimbabwe’s tough fiscal measures have increased the cost of doing business for the whole economy.

Presenting the group’s performance for the period ended March 31 2024, the listed agriculture and agri-processing firm criticised the suspension of import duty on basic commodities including sugar, and “aggressive corporate taxes” in the just-ended financial year. It said:

Statutory Instrument 80 of 2023 introduced at the onset of the financial year saw the suspension of import duty on basic commodities including sugar, affecting the industry significantly.

The Company was not spared from the effects of the above, which contributed to the decline in financial performance.

The Statutory Instrument was subsequently repealed in the last quarter. Amongst other fiscal policy measures was the introduction of more aggressive corporate taxes, effective 1 January 2024, thus increasing the cost of doing business for the whole economy.

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The firm said during the period, an inflation-adjusted operating loss of ZWL1.3 trillion was recorded for the year and currency and inflationary dynamics continued to cause distortions in financial reporting.

The company recorded a net monetary gain of ZWL2.6 trillion (2023: monetary loss of ZWL0.1 trillion).

The actuarial loss on the post-retirement medical aid obligation (PRMA) and Retirement Gratuity (RG), indexed at ZWL1.3 trillion, primarily influenced this outcome. The remaining balance was attributed to the net indexing effect on other income statement items.

This net monetary gain significantly transformed the operating loss of the year into an inflation-adjusted profit of ZWL0.5 trillion.

Excluding the indexing effect on the actuarial loss of PRMA and RG, the profit before tax would have amounted to a loss of ZWL0.2 trillion. 

Tongaat Hullet said it continues to pursue strategies that minimize risk to the business, create value and exploit opportunities that arise. It added:

A new year awaits with more opportunities to seize and complexities to navigate while ensuring the core business operates sustainability.

More: Pindula News