On February 1, 2017 SI20 came into effect, raising prices of all meat, fish, cereals products, as a result of imposing VAT on these products. The immediate effect was a public outcry among consumers and livestock producers on the increase to these basic grocery items.
FINANCE minister Patrick Chinamasa, On February 7, 2017 scrapped the implementation of Statutory Instrument 20 (SI20) that imposed 15% VAT on rice, fish, margarine, potatoes and meat. The minister’s reason was that, unlike what was done, he had to first consult before introducing the levy.
The minister’s argument for SI20 of 2017 was to raise the much needed funds to pay salaries and other projects. The Finance minister told the House that he charged the 15% VAT on the products on the basis of SADC protocols that Zimbabwe ratified, where member States are supposed to harmonize tax regimes.
The implications of SI20 of 2017 on Zimbabweans’ ability to afford basic foodstuffs was enormous and the immediate public outcry warranted as most Zimbabwean households struggle to afford a well balanced diet due to the tough economic conditions currently not sparing many. The scrapping of SI20 will surely be a welcome move by the masses and earn the minister brownie points from the public.
For now consumers will celebrate but knowing that the minister needs to raise funds for salaries therefore something else will possibly be taxed in the near future to raise those revenues.
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