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Finance Minister Mthuli Ncube has allowed retailers to buy directly from manufacturers and has also exempted basic food items including bread, milk, cooking oil, mealie meal, salt, sugar, and flour from Value Added Tax (VAT) purposes. In a statement seen by Pindula News, Ncube also said other basic commodities that include meat, rice, bath and laundry soap, washing powder, toothpaste and petroleum jelly have been moved to standard rating, hence, price increases should be minimal. Read the statement:
<blockquote>
<h3>PRESS STATEMENT 2024 REVENUE MEASURES ON ROUTE TO MARKET, VALUE ADDED TAX AND SUGAR CONTENT ON BEVERAGES</h3>
Introduction 
1. Treasury constituted a Technical Committee to receive input from Representative Members under the umbrella body of the Confederation of Zimbabwe Industries.
2. The Committee undertook an impact analysis on the implementation of some of the measures introduced through the 2024 Budget, in particular with regards to tax compliance on route to the market, mitigation of consequences of the sugar on health through a special surtax, and a few tariff lines that were omitted on exemption from Value Added Tax, in order to cover the whole value chain that includes cotton and soya seeds to cooking oil.
3. Findings of the Committee have been presented; hence, Treasury advises on the following fine tuning of the prevailing measures that are enshrined in the Finance Act and subsidiary legislation as follows: Route to Market
4. Taking into consideration the need to preserve some of the pertinent arrangements for delivery of goods into the market efficiently, the legislation will be fine-tuned as follows:
• Retailers can purchase from manufacturers as long as they have obtained a valid Tax Clearance Certificate, and are VAT registered;
• Manufacturers are permitted to sell to institutions such as hotels, schools and other corporates, provided such clients are registered for VAT and possess a valid Tax Clearance Certificate;
• In order to protect the quality of goods and safety of consumers, perishable products that include bread and milk products will be distributed by manufacturers directly to retailers;
• Concern was raised with regards to survival of the rural traders, since they are not registered for tax purposes. These traders will however. continue to purchase their goods from the wholesalers, hence there will not be any disruption of trade. Manufacturers will also supply direct to small traders in the rural areas:
• Where the manufacturer distributes directly to customers who are not registered for VAT, are not in possession of a valid VAT certificate and also not registered for Income Tax purposes, a 5 percent Withholding Tax shall apply:
• Companies that serve online customers are allowed to continue to transact using this method provided they are fiscalised so as to guarantee compliance to the Value Added Tax: and
• In the interest of promoting an environment conducive for healthy and efficient tax collection. local authorities are urged to issue vendors with licenses that are linked to the place of business.
Special Surtax on Sugar Content
5. Cognisant of the need to build volumes, the Special Surtax on Sugar Content on specified beverages has been adjusted to USS0.001 /gram and will be effective on the date of gazetting.
6. For the avoidance of doubt. the Special Surtax will apply on added sugar only.
7. In addition, given the possibility of substituting sugar with sweeteners, these will be deemed as sugar for tax purposes.
8. As revealed through the consultation process, the increase in price of the beverage products should be modest, hence the tax is not expected to disrupt the market.
Value Added Tax
9. In order to ensure consistency in the Cooking Oil value chain, cotton seed and soya beans and its derivative products will be included in the VAT exemption schedule.
Basic Commodities
10. Treasury’s attention has been drawn to the impending increases in prices of the basic commodities. as a result of the re-arrangement of the Value Added Tax system where some of the goods have moved from zero rating to exemption, in line with regional practice and in the interests of revenue to the Fiscus.
11. Basic food items that include bread, milk, cooking oil, mealie meal, salt, sugar, flour, are exempt from Value Added Tax purposes, hence there should be no price increases.
12. Other basic commodities that include meat, rice, bath and laundry soap, washing powder, toothpaste and petroleum jelly have been moved to standard rating, hence, price increases should be minimal.
Statement to the market on moratorium
13. A statement that purports to grant a moratorium by Government on the implementation of the Finance Act, as well as subsidiary legislation obtained under Statutory Instruments 248 and 249 of 2023, has been widely circulated.
14. The Legislation that is purported to have been granted a moratorium pertains to the route to the market, VAT zero rating and exemption and special surtax on sugar.
15. For the avoidance of doubt. the Ministry of Finance, Economic Development and Investment Promotion does not relay information through third parties hence advices of the above steps that will be taken as a consequence of the consultation process.
Conclusion
16. The Ministry of Finance, Economic Development and Investment Promotion wishes to take the opportunity to thank stakeholders on the valued contribution to the above process.
</blockquote>
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Retailers Allowed To Buy From Manufacturers, Basic Food Commodities Exempted From VAT -  Ncube

The cost of meat in Zimbabwe has increased due to the introduction of a new 15% Value Added Tax (VAT) implemented through the 2024 National Budget by Finance Minister Mthuli Ncube.
According to a statement from Texas Chicken, a subsidiary of Associated Meat Packers that specializes in chicken, their chicken prices have remained the same, but they have added the VAT. In a statement seen by Pindula News, the company said:
<blockquote>
Dear Valued Customers
Texas Chicken have been forced to increase beef, chicken, pork and fish prices in line with the introduction of 15% VAT by the Ministry of Finance on the aformentioned product categories.
This is effective 1 January 2024. Please note that our product prices are NOT being increased by our butcheries, but only by the addition of VAT.
Thank you for understanding.
TEXAS CHICKEN MANAGEMENT
</blockquote>
Journalist Hopewell Chin’ono pointed out that these taxes burden poor Zimbabweans who are already facing unemployment and unstable incomes due to a struggling economy and failed politics. He said:
<blockquote>
This is the moment those that say they don’t do politics look foolish and stupid because politics is now doing them, it always does. When we talk about the direct consequences of corrupt rule, incompetence and misplaced policies, this is what we will be talking about! These economic failures will affect you regardless of your political views, when we fight for a better society, we are fighting for everyone including those who are used by ZANUPF as its social base! Economic policies affect people across various political perspectives, they don’t segregate. The conversation around improving society involves addressing such political issues that impact everyone financially especially the poor in townships and rural areas regardless of their political affiliation.
</blockquote>
Some experts, like Professor Gideon Zhou from the University of Zimbabwe, who specialises in Governance and Public Management, have expressed concerns that the budget could have significant negative effects. He said:
<blockquote>
Indeed, a very extractive budget informed by the canons of austerity. However, extracting revenue from an already over-taxed and poverty-ridden citizenry looks like a recipe for far-reaching worse-off livelihood future scenarios. We are at risk of compromising the concerns of Vision 2030 which envisages not only a HEALTHY ECONOMY but a HEALTHY SOCIETY as well. The 2024 Budget seems to be leaving society behind in its efforts to steer the economy towards a middle-income ranking.
</blockquote>
Government authorities, including Finance Minister Mthuli Ncube and Reserve Bank of Zimbabwe Governor John Mangudya, have defended the taxes, stating that they are necessary to generate revenue for the struggling economy. They argued that Zimbabwe is unable to secure credit facilities from international financial institutions, hence the need to raise revenue internally. 
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The Cost Of Meat Has Gone Up In Zimbabwe Due To The New 15% Value Added Tax

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