Margaret Matibiri Herald Reporter
Local meat production companies have implored Government to consider scraping the 15 percent value-added tax (VAT) on all meat products which was effected beginning this month saying it has a negative impact on the viability of their business.
Speaking during a tour by the Parliamentary Portfolio committee of Lands, Agriculture, Mechanisation and Irrigation Development on Friday, the managing director of Surrey Meats, Mr Simon Arnold said the 15 percent VAT that had been effected will cripple their industry.
Government recently gazetted Statutory Instrument 20 of 2017 (SI 20 of 2017) which came into effect on February 1, 2017.
SI20 levies a Value Added Tax (VAT) of 15 percent on meat, meat products, fish, potatoes, rice and margarine, products which were previously zero VAT rated.
Mr Arnold said; “The S120 of 2017 is hurting our industry as the cost of doing business in Zimbabwe was already high before it was effected.
“Due to its introduction, our products will be going up by 15 percent, making our products prices less attractive compared to those products imported by our competitors,” said Mr Arnold.
He also said the strain on their industry would descend heavily on their employees as they will be affected most when big companies opt for retrenchment as the only means of staying in business.
“We have about 518 employees including management and as a result of SI20 of 2017, prices will go up,” he said.
“The demand will go down and so will our produce, forcing us to cut back on labour leading to some of the workers being retrenched which we would not want to do,” he said.
He said the SI20 will force farmers to market and sell their livestock informally which will also affect their business.
“We harvest five million chicken per annum and only 1,2 million comes from our own farm which shows that we depend on the farmers that sell us their livestock. As the marketing of our products is affected, it will force farmers to market and sell their produce informally.”
“Government should consider revisiting the Statutory Instrument as it will affect us immensely and also lead to unemployment. Instead, they should consider giving us incentives as local companies.”
Mr Arnold also said a bumper maize harvest would help out in their industry as it might lower the costs of their inputs which are currently still expensive.