Tobacco levy back TOBACCO FIELD
Tobaccco field

Tobaccco field

Oliver Kazunga Senior Business Reporter
THE government has re-introduced the tobacco levy on growers starting in January 2015 to finance reforestation activities, a Cabinet Minister said yesterday.

The tobacco levy on sales by growers was repealed in March 2005 to encourage smallholder participation in the production of the golden leaf.

“I propose to re-introduce tobacco levy on tobacco growers at a rate of $0,015 of each dollar of the selling price, with effect from 1 January 2015. The revenue generated will be ring-fenced to finance reforestation activities,” said Finance and Economic Development Minister Patrick Chinamasa while presenting the 2015 national budget in Parliament.

He said tobacco production has increased from 58.6 million kilogrammes in 2009 to 216 million kgs in 2014. Minister Chinamasa said this year’s figure was the second highest harvest in Zimbabwe’s history of tobacco growing adding that this highlights the success of the Land Reform Programme adopted by the government in 2000.

“The number of tobacco growers has also significantly increased from about 29,000 in 2009 to over 80,000 in 2014.

“The growth in tobacco production has increased per capita income for tobacco growers to an average of about $8,000 in 2014, thus creating a base for potential taxpayers,” he said.

Following the adoption of the multicurrency system in February 2009, the economy has continued to be haunted by liquidity constraints.

Against this background, the tobacco sector has been critical to the economy through employment creation as well as providing liquidity support, among others.

The Tobacco Industry and Marketing Board (TIMB) has revealed that as of November 21, 2014, more than $700 million had been realised from 122 million kg Zimbabwe has exported to different parts of the world since the beginning of the year.

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