Harare Bureau
LOCAL soya bean farmers may secure a debt write-off from the government for unpaid Value Added Tax accumulated between February 2009 and August 2012.
The farmers were not remitting the VAT assuming that soya bean was zero rated for VAT purposes, Finance and Economic Development Minister Patrick Chinamasa said.
To ensure affordability of basic goods, the government zero rated most agricultural products for VAT purposes in February 2009, but soya beans was excluded from the list.
However, farmers continued operating on the assumption that soya bean was zero rated for VAT purposes. As a result, no VAT was collected on sales of the commodity.
Due to the oversight by farmers and laxity on the part of the Zimbabwe Revenue Authority, farmers accumulated a huge tax liability between February 2009 and August 2012.
Minister Chinamasa said this has potential to drive farmers out of business or constrain capacity.
“In support of the continued cultivation of soya bean, which is a critical input in the production of cooking oil and stock feeds, I, propose to provide relief to farmers through zero rating of soya beans for the period 1 February 2009 to 31 July 2012,” said the minister.
Minister Chinamasa said soya bean was emerging as one of the cash crops with great potential for multiple benefits to farmers and agro industrial processing. Banks have since set aside $25 million for soya bean production for 2015/2016 cropping season.
“Its production is of significant importance to the economy, as a key input in stock feed production, as well as oil processing industries. The potential for employment creation through value addition is immense and hence, the need for enhancing productivity of this crop,” he said.
Zimbabwe requires an estimated at 240 000 tonnes of soya, against current production of around 60 000 tonnes. At its peak, the sector produced 175 000 tonnes in 2001.
The shortage of soybean has seen oilseed processors importing to augment local supplies. According to Zimbabwe Oil Expressers Association, processors require about 350 000 tonnes of oil seed per year to have their factories to run at full capacity.
Apart from soya, the expressers also use cotton seed as feedstock. But production of both crops have been declining over the past few years, forcing expressers to largely depend on imports.