Chronicle Editor
Oliver Kazunga, Senior Business Reporter
THE Confederation of Zimbabwe Retailers (CZR) says it will continue engaging relevant authorities over Value Added Tax collection on rice packages of 25 kilogrammes and below with a view to bring a “just and fair” conclusion on the matter.
Recently, the Zimbabwe Revenue Authority (Zimra) had insisted to collect Value Added Tax (VAT) on rice packages of 25kgs and below backdated to February 2017.
Responding to concerns raised by CZR, the tax collector last week, said Statutory Instrument 273 of 2003 as amended provides for rice that is exempt and what is not so listed is thus standard rated.
It said the challenge appears from failure to track the changes with respect to specific tariff headings.
Zimra underscored that the VAT status of rice should not be generalised but should be specific to tariff codes.
However, CZR president Mr Denford Mutashu yesterday said their members respectfully disagree with the legal basis that Zimra was relying on regarding the matter.
“CZR reaffirms its earlier position that the attempt to collect VAT on rice backdated to February 2017 is unjustified as rice is exempt from VAT.
“We have noted that Zimra confirms the need to continued dialogue on this issue and we confirm that we will continue to engage relevant authorities with a view to bring a just and fair conclusion on this matter,” he said in a statement.
Mr Mutashu said that the SI under which rice was standard rated, only remained in force until February 16, 2017 when SI 26A of 2017 was published repealing SI 20 of 2017.
“The effect of the repeal was to restore position set out in SI 9 of 2016 that the rice tariffs in query (including pre-packed rice in packages or less than 25kg) was VAT exempt.
“It’s the same basis by which margarine, maheu and potatoes were and are currently VAT exempt,” he said.
Zimra has said VAT administration relies on self-assessment declarations, and thus from time to time and based on risk management framework, the tax collector carries out verifications or audits of such self-assessed declarations.
It stated that it was during such audits that errors of interpretation of the law such as the case in point are then discovered and corrected.
Zimra said the amendment of VAT regulations clearly shows the category of rice that is standard rated and that which is zero rated.
It said rice packed in quantities less than 25kg was standard rated in general except for broken rice. – @okazunga
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