Government cuts back on VAT list to snub price hikes 

Government cuts back on VAT list to snub price hikes

Brian Rungano Temba

In a bid to curtail the skyrocketing prices on basic comodities, Treasury has made adjustments to the value added tax exempted goods and services.

Recently released Statutory Instrument 15 of 2024 , states that amendments have been made by the Ministry of Finance, Economic Development and Investment Promotion on the Value Added Tax General Regulations on goods or services.

” In respect of which the exemption under paragraph (j) of section 11 of the Act shall apply, shall be as follows—

Water supplied through a pipe for domestic use. Supply of domestic electricity. Rates charged by a local authority.

Fuel and fuel products referred to in paragraph 5 of PartII of this Schedule. Ethanol fuel under commodity code 2207.10.10. Road toll fees collected by the Zimbabwe National Road Administration established in terms of the Road Act [Chapter 13:18].

Items of agricultural equipment or machinery referred to in paragraph 4 of Part II of this Schedule. Tobacco supplied on the auction floors in terms of the Tobacco Industry and Marketing Act [Chapter 18:20]. Other tobacco not sold on the auction floor referred to in paragraph 6 of Part II of this Schedule.11,” read the Statutory Instrument.

This follows Treasury’s promise in Parliament to bring sanity to prices of basic goods last week.

Finance Deputy Minister Kudakwashe David Mnangagwa had said the Treasury is working on what he termed a “permanent solution” to address price and exchange rate distortions.

President Emmerson Mnangagwa at his first cabinet meeting of the year revealed that the central bank and Finance Ministry will soon implement a raft of policies to deal with inflation and local currency. The local dollar has remained volatile, despite a series of measures introduced by authorities.

The Finance Deputy Minister told Speaker of Parliament Jacob Mudenda Wednesday during a Question and Answer session that a monetary policy statement would be issued soon. MP Clemence Chiduwa had asked.

In his response, Mnangagwa said, “I would not want to pre-empty a monetary policy statement as well as fiscal policy announcements that will be coming, but would acknowledge that the increase in the exchange rates and inflation figures are something that we are fully aware of.”