Retailers decry backdated VAT on rice

Harare Bureau
THE Confederation of Zimbabwe Retailers (CZR) has condemned the Zimbabwe Revenue Authority (Zimra)’s persistence to collect value added tax (VAT) on rice claiming this was promoting policy inconsistency and threatening the business sector’s contribution to the development of the country’s economy.

This follows Zimra’s recent move insisting to collect VAT on rice packages of 25kgs and below backdated to February 2017, as highlighted in recent media reports.

According to CZR the move is inconsistent with the VAT exemption for rice set out in Statutory Instrument (S.I.) 9 of 2016.

Although it was amended by S.I. 20 of 2017 with effect from February 1, 2017, its position that all rice (including prepacked rice in packages or less than 25kg) was VAT exempt was later restored by S.I. 26A of 2017 published on 16 February 2017, repealing S.I. 20 of 2017.

In a Press statement released yesterday CZR through its president, Denford Mutashu, said that Zimra’s move was illegal and that this imposes serious implications on the country’s low-income families who will not be able to afford the basic commodity.

Over the years rice has been among basic commodities such as mealie-meal that a lot of people rely on. Mr Mutashu noted that Zimra’s decision will also affect the country’s policies and business sector.

“The decision by Zimra lays bare the need for policy consistency. Zimra was quiet for three years, not indicating that VAT was to be collected on rice and it is only recently that it has sought to collect the VAT, which was previously and still is exempt,” he said.

“We wish to point out that it is an established principle of law that no tax can be imposed on a party, unless the same is clearly set out in legislation and at present, the law is that rice is exempt from VAT and even the Zimra system has not been and is presently not charging VAT.

“Effecting the decision is not only a violation of property rights but a direct act on any confidence the business sector had in the economy and we believe that for this economy to attract both local and foreign investment there is a need to have the respect for the rule of law and policy consistency.

As CZR, we state unequivocally that the VAT directive undermines His Excellency President Emmerson Mnangagwa’ pro-business stance enunciated by the “Zimbabwe is Open for Business” mantra”, he stated.

Meanwhile, CZR assured the nation that it will continue engaging the Government on the issue to ensure that all stakeholders comply, “with the law for the benefit of the country”.