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TREASURY has gazetted the suspension of Value Added Tax (VAT) on selected basic commodities with effect from today as part of Government measures to tame price increases while boosting consumer purchasing power and aggregate demand for businesses.
Consumers and economic analysts have welcomed the gazetting of the new regulations, which give full effect to early pronouncements by the Treasury following the fine-tuning of some of the measures introduced through the 2024 National Budget.
Basic food items such as bread, milk, cooking oil and maize meal being exempted from Value Added Tax, thereby eliminating public fears of price increases that had gripped consumers.
Earlier the Government had engaged and considered submissions from business leaders who felt that the proposed VAT measures in the 2024 National Budget were likely to strain ordinary people and businesses as the move had the potential to fuel price escalation beyond income levels.
The stakeholder concerns prompted the Treasury to constitute a technical committee to receive input from representative members under the umbrella body of the Confederation of Zimbabwe Industries.
The committee undertook an impact analysis on the implementation of some of the measures introduced through the 2024 Budget, in particular with regards to tax compliance en route to the market, mitigation of consequences of the sugar on health through a special surtax and a few tariff lines omitted on exemption from Value Added Tax, to cover the whole value chain that includes cotton and soya seeds to cooking oil.
Through Statutory Instrument 10A of 2024, published in a supplementary Government Gazette issued yesterday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, said the Customs and Excise (Suspension) Regulation 2003 published in Statutory Instrument 257 of 2003 has been repealed.
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