Retailers sweat over looming VAT on rice

By Theophilus Chuma

Retailers have pleaded with the Zimbabwe Revenue Authority (ZIMRA) to reconsider plans to effect a fifteen percent Value Added Tax [VAT] on rice packages of 25kg and below backdated to February 2017.

Over four months after the tax collector made known its intentions to effect a 15 percent value added tax on rice packages of 25 kilograms backdating to 2017, retailers are sweating over this decision as they desperately seek for reconsideration.

 Fears are this will push many out of business.

Responding to earlier calls by players for a reversal of this position, government had advised that the players should seek a payment plan with ZIMRA.

“The Confederation of Zimbabwe Retailers appeals to President Mnangagwa and VP Chiwenga to consider the decision to charge VAT on rice and even in retrospect backdating it to 2017. The decision has serious negative ramifications not only to suppliers, retailers and wholesalers, but to the general economic well-being of the country/

“Remember we are fighting the covid-19 pandemic and in the midst of the fight a lot of companies have lost a lot of revenue and they are strgulling to get back on their feet. So a decision during this pandemic at a a time where business instead was supposed to be receiving a stimulus package to promote and regenerate the affected businesses – such a decision has serious consequences on the supply and genera pricing of the commodity.

“It affects confidence because it is viewed by many in business as a serious policy inconsistency where business is supposed to be forced by ZIMRA to pay VAT in retrospect, because that VAT was never collected by business,” said Confederation of Zimbabwe Retailers president Denford Mutashu.

While this will work to address compliance to the tax collector, and existing legislation on tax, experts, however, highlight other avenues which can be pursued.

Industry leaders agree that while Zimra has an obligation to satisfy existing tax laws, it is also critical for the authority to give audience to retailers.

“The consumer is going to be the last user and this is going to affect pricing. Importation of basic commodities such as rice is something that is not supposed to be frightening for retailers and wholesalers. So to Zimra we say if they can look into this position again, said Tinashe Manzungu – Zimbabwe National Chamber of Commerce president.

The retailers are sitting with bated breath as they plead with authorities for a reprieve which they say will protect both their business and the consumers.