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Captains of the industry are negotiating with the Government to reconsider the sugar tax currently pegged at US$0.001/gram, which has resulted in a sharp rise in beverage prices.
The Confederation of Zimbabwe Industries (CZI) president, Kurai Matsheza confirmed the ongoing engagements. He said,”We are engaging the authorities. Yes we understand the validity of these taxes, but the increase of prices is extreme.
So we are engaging with the Government so that we can see ways in which prices can accommodate everyone at large”.
There is an added tax on sugar which is US$0.001per gram and due to that tax producers of sugary products to cater for it, prices have to go up and you have seen prices of products like Mazoe Orange Crush and Beverages products they have gone up as a way of covering the US$0.001/gram tax which was put in place.
This will only mean that manufacturers of beverage products will lose market share, their volumes will go down because the consumers will not afford to purchase for the products and this will even force them to produce very few products hence a downturn in business.
Zimbabwe National Chambers of Commerce (ZNCC), Mike Kamungeremu, said there is nothing they can do except factor the new sugar tax into the pricing of products. He said:
Government is trying to raise revenue at the same time in some cases they are trying to discourage consumption of the same products, where you then say prices are going to come down, but prices are not going to come down regarding those items except if the tax is reduced or removed.
But as it stands because the tax has already been introduced it means those prices will now stay where they are and what we then anticipate to see is probably a reduction in their consumption or probably workers getting more so that they can afford them, but the truth of the matter is that the tax has been introduced and the prices have already gone up so it is a reality that we have to live with.
An economic analyst Victor Bhoroma warned that the sugar tax will make Zimbabwean products less competitive on foreign markets. He said:
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