New SI to reverse food stuffs 15% VAT: To clear confusion on basic products prices
February 17, 2017 Business
Business Reporter
A NEW Statutory Instrument is being crafted to repeal the implementation of the 15 percent Value Added Tax (VAT) on selected basic consumer products, a senior Government official said.
This clears confusion in the market after business increased prices of basic commodities in the last few weeks, which they blamed on the new tax.
The move had sparked public outcry as consumers felt the new price structure would worsen livelihoods and chew into their meagre incomes. Although Finance and Economic Development Minister Patrick Chinamasa had announced the suspension of the 15 percent VAT last week, most businesses maintained high prices. Treasury had introduced the 15 percent VAT on previously zero rated products such as beef, chicken, fish, rice, potatoes, margarine and mahewu through SI 20 of 2017.
Yesterday Permanent Secretary in the Ministry of Finance and Economic Development, Mr Willard Manungo, said a new SI was being gazetted and the suspension of the new VAT was with effect from yesterday.
He therefore ordered businesses to revert to old prices.