Finance Minister, Mthuli Ncube, has delivered a fatal blow to local retailers following his decision to maintain an earlier pronouncement that gave ZIMRA the power to collect Value Added Tax (VAT) on rice for periods backdated to 2017.
The Confederation of Zimbabwe Retailers (CZR) had approached Treasury seeking exemption from paying VAT on rice packages of 25 kilogrammes or less. They argued that government’s decision to order them to pay VAT on rice was undermining the need to foster property rights and the ‘Zimbabwe is open for business’ mantras enunciated by President Emmerson Mnangagwa.
But, in a letter addressed to CZR president, Denford Mutashu, dated March 15,2021, Ncube said Treasury cannot exempt retailers from paying VAT on rice.
“…..Taking into account that the matter is already before the courts of law, I wish to advise that the Treasury cannot accede to your request for a retrospective exemption of rice from VAT. This implies that the outstanding VAT remains due and payable,” Ncube said.
He added: “I am aware that some of your members have already engaged ZIMRA with a payment plan. This is an alternative the members of CZR may wish to pursue considering the tax liability has been significantly reduced by the depreciation of the local currency unit against the United States dollars.”