Cornered Mthuli Drops Evil Tax Proposals
9 January 2024
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By Business Reporter – Finance Minister Mthuli Ncube has dumped his anti-people tax proposals on basic commodities he proposed in the 2024 National Budget.

Mthuli’s backtrack comes from fierce confrontations by the business community and the public over his evil tax proposals.

The elite minister’s initial budget introduced staggering taxes on essential items like bread, milk, cooking oil, and maize meal, leading to a noticeable price spike prompting widespread concerns among Zimbabweans.

A value-added tax (VAT) was also imposed on basic commodities such as meat, rice, bath and laundry soap, washing powder, toothpaste, and petroleum jelly.

Responding to mounting resistance from businesses and appeals to reconsider the impact on ordinary citizens, Mthuli announced on Monday the suspension of the proposed VAT on the aforementioned items.

As part of the revised measures, retailers can now directly purchase from manufacturers, provided they have a valid tax clearance certificate and are VAT registered. Manufacturers are also permitted to sell to institutions like hotels, given the clients are VAT-registered.

To maintain consistency in the cooking oil value chain, cottonseed, soya beans, and their derivative products, are now exempted from VAT.

The Special Surtax on Sugar Content for specified beverages has been adjusted to US$0.001/gram, effective upon gazetting.

Mthuli acknowledged concerns about the survival of rural traders who are not tax-registered. Such traders can continue purchasing from wholesalers without disruption.

Manufacturers are also authorised to supply directly to small traders in rural areas.

However, a 5 percent Withholding Tax will apply if manufacturers distribute directly to customers not registered for VAT or income tax purposes.

Online transactions for companies serving online customers are permitted, provided they comply with visualisation for VAT.

Local authorities are urged to issue licenses to vendors linked to their place of business to promote efficient tax collection.
Addressing the issue of the Special Surtax on Sugar Content, Mthuli emphasised that it applies only to added sugar. Sweeteners will be treated as sugar for tax purposes. The adjustment is aimed at building volumes without significantly disrupting the market.

In an effort to curb potential price increases resulting from VAT changes, products like salt, sugar, and flour have been exempted from VAT, ensuring their prices remain stable.

Mthuli debunked circulating statements claiming a government moratorium on the implementation of the Finance Act, emphasising that such information is not disseminated through third parties.

He expressed gratitude to stakeholders for their valuable contributions that led to the fine-tuning of measures introduced in the 2024 National Budget.