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Minister Patrick Chinamasa

The Government on Tuesday suspended the implementation of Statutory Instrument 20 of 2017 which imposed a 15 percent VAT on basic consumer goods. Finance and Economic Development Minister Patrick Chinamasa said the suspension was meant to pave way for further consultation.

The suspended tax was proposed in the 2017 national budget and had been imposed on rice, margarine, cereals, maheu, potatoes, meat (pork, beef, fish and chicken) with effect from last month.  Minister Chinamasa said following concerns raised by parliamentarians, consumers, the business community and other stakeholders, Government decided to suspend the tax and further consult. Most retailers and suppliers increased prices of the affected commodities by margins of up to 40 percent soon after the introduction of the new tax triggering an outcry from consumers.

Most of the basic commodities were now beyond the reach of ordinary consumers hence the Government’s response. We want at this juncture to commend Government for demonstrating that it is sensitive to the plight of its citizens. Basic commodities should remain affordable to the majority of consumers because consumers cannot do without these basics.

We, however, remain cognisant of the fact that the bulk of Government revenue is from taxes such as VAT but the taxes should not make basics unaffordable to the majority of consumers. Now that the Government has suspended the VAT on basics, businesses should revert to the old prices so that the commodities are affordable.

Consumers on their part should boycott the businesses that refuse to revert to the old prices. After further consultations, it is our fervent hope that Government will come up with either zero VAT on these basics or very little percentage which will ensure the basics remain affordable.

It is a fact that salaries in both public and private sector have remained stagnant for a number of years and therefore consumers cannot absorb increases in prices of commodities.