By Business Reporter- In the wake of recent anti-people tax reforms implemented by Finance Minister Mthuli Ncube, the cost of bread and meat and several basic commodities have spiked, surging by 20% within a month.
Most notable is the price of bread which was previously at US$1.00 a loaf and now stands at US$1.20, marking an additional increase from the briefly reduced prices of US$1.10 to US$1.20 earlier this month.
Retailers cite fluctuations in the exchange rate as the driving force behind the increment, with major supermarkets in Harare reflecting prices ranging between $10,000 and $11,000.
Denford Mutashu, president of the Confederation of Zimbabwe Retailers (CZR), attributes the hike to supply-side dynamics influenced by official and unofficial exchange rate movements.
While some tuckshops are selling bread at the elevated price of US$1.20, traders in high-density suburbs are pricing it at US$1.10.
Grain Millers Association of Zimbabwe (GMAZ) Chairman Tafadzwa Musarara denies a hike in wheat prices, directing inquiries to the National Bakers’ Association of Zimbabwe (NBAZ).
NBAZ president Dennis Zinyama attributes the price surge to the introduction of new taxes by the Treasury.
He explains that the shift in bread’s taxable status from zero-rated to exempt supply means manufacturers can no longer claim input tax on production and distribution costs.
As a result, these costs are now integrated into the overall production and distribution expenses, compelling a price adjustment.
This rise in bread prices compounds economic challenges for consumers, coming on the heels of government decisions to tax civil servants’ allowances, further impacting a population grappling with increased living costs.