Last week, we celebrated Finance minister Patrick Chinamasa’s responsiveness when he moved to scrap a 15% value-added tax (VAT) that had been imposed on meats, cereals and other foodstuffs.
Source: Chinamasa must finish what he started – NewsDay Zimbabwe February 13, 2017
Comment: NewsDay Editor
However, it is dispiriting that a week on, the VAT has not been scrapped and Chinamasa’ ministerial statement so far is nothing, but hot air.
Chinamasa should move quickly to introduce another statutory instrument that scraps the new levy, as so far, retailers have no obligation to scrap the VAT, which they had passed onto customers.
It is one thing for Chinamasa to make declarations and another to effect legislation that backs those statements.
Zimbabweans are suffering under the yoke of a dysfunctional economy, and it does not help that the government thinks taxes are the best way to raise revenue.
What Chinamasa should be doing is to spur economic growth and consumer spending, rather than putting tax on goods that are zero-rated.
What is needed now is innovation on the part of government, as it should find ways of increasing revenue, without being a burden on the already suffering masses.
If he is desperate to raise taxes, then the best idea would be to first grow the economy and ensure that people have disposable incomes and are willing to spend more.
A parliamentary visit to abattoirs last week bears testimony to the havoc that the new VAT has wrought, as Zimbabweans quickly reverted to substitutes and quit buying meat, which was now more expensive.
This has a domino effect on businesses, whose ability to make profits and pay more taxes is severely hampered, and in the end, it is the government that is left holding the short end of the stick, as tax revenues fall.
In this regard, we urge haste in the scrapping of the new VAT and Chinamasa should be acting on this with the urgency it deserves.
We hope this episode also teaches the government the value of consulting stakeholders before implementing laws that have a far-reaching effect on people’s lives.
If the government had consulted before implementing Statutory Instrument 20 of 2017, which introduced VAT on meats and cereals, then there would be no need for this climb down and the confusion that has come with it.
We hope Chinamasa does the right thing and immediately gazettes another statutory instrument that puts on hold SI 20, which was clearly not well thought out.
Zimbabweans have suffered for far too long and deserve a reprieve.