By Sij Ncube
HARARE, January, 2016 – President Robert Mugabe government, hardpressed to pay outstanding bonuses to its workforce among other operational imperatives, has introduced Value Added Tax (Vat) on imported vegetables.
This is according to the just released Statutory Instrument 9 of 2016 in which the government imposes tax on vegetables, mineral water, fruits, eggs, among other produce, starting February 1, 2016.
Some of the vegetables now liable for taxation include cucumbers, carrots, mushrooms, garlic, lettuce, cabbages, cauliflower, rape, kali, pumpkins and squash.
The list also includes gloves and raincoats.
Finance Minister Patrick Chinamasa said he made the taxation of vegetables and other named commodities in terms of Section 78 of the Valued Added Tax Chapter 23:12.
UK-based journalist-turned economist, Bekithemba Mhlanga said the levy was yet another desperate attempt by the beleaguered administration to mop up funds to bankroll its operations.
“There are low on revenue and facing serious challenges paying civil servants and therefore is scrapping the barrel,” said United Kingdom based journalist-turned economist, Bekithemba Mhlanga.
He added: “… But such a far-reaching taxation system discourages investment because a number of investors are wary of paying a number of taxes even in agriculture.”
The delayed payment of outstanding bonuses to civil servants is also a culmination of repeated delays in remunerating a beleaguered workforce in 2015.
Revenue collections by the Zimbabwe Revenue Authority (Zimra) have generally dwindled past few months largely due to high unemployment hovering above 80 per cent.
The new measures are seen as part of government’s current measures to collect tax from a vast, unregulated but money spinning informal sector.
Some analysts claim the increase of the taxation base, apart from being aimed at widening government’s catchment area, is also intended at protecting the local industry, particularly the mainstay agricultural sector.
Players in the troubled sector blame some of their woes on the influx of fresh farm produce mostly from neighbouring South Africa which are commonly traded cheaply at Harare’s popular vegetable market, Mbare Musika.
Zimbabweans are regarded as one of the highest taxed citizens on earth.