Crisis as the govt hikes farmers’ tax

Source: Crisis as the govt hikes farmers’ tax – DailyNews Live

Bridget Mananavire      1 April 2017

HARARE – President Robert Mugabe’s stone-broke government has imposed a
new 10 percent tax on tobacco sales, prompting angry farmers to threaten
to withhold their crops for the current marketing season.

This comes as impoverished Zimbabweans are reeling from a wave of other
additional taxes that the government has recently imposed on them,
including the shocking hiking of traffic fines, the taxing of commuter
omnibuses and hairdressers.

Reacting to Thursday’s directive from the Zimbabwe Revenue Authority
(Zimra), which caught most of the tobacco growers unawares, the irate
farmers savaged the government for the move.

“I think it’s not fair on the part of tobacco farmers. Why just tobacco
and not other crops? This will add to the burden on farmers in paying
rents and debts,” the Zimbabwe Tobacco Association’s agricultural manager,
Casper Mlambo, told the Daily News yesterday.

“Moreover, there are other levies that are already paid by farmers. This
10 percent will impact more widely on the smallholder farmers. I don’t
know why they have done this, but we will continue engaging them (the
government) on this as 10 percent is a lot of money,” he said.

Scores of affected farmers held an emergency meeting in Harare yesterday,
where they warned that the government’s decision would disrupt the 2017
tobacco marketing season.

In its Thursday directive, Zimra ordered the Tobacco Industry and
Marketing Board (TIMB) to withhold 10 percent of gross sales from every
farmer who does not have a valid tax clearance certificate.

“Please be advised that in terms of section 80 (2) of the income tax
Chapter 23:06 as quoted below: `subject to this section, unless a payee
furnishes the paying officer with a tax clearance certificate, the paying
officer shall withhold 10 percent of each amount payable to the payee
under the contract concerned, and shall remit each amount so withheld to
the commissioner on or before the 10th day of the month following that in
which payment was made’.

“In this regard, you are requested to comply with the above instruction by
withholding 10 percent from each supplier who does not have a valid tax
clearance certificate and issue the supplier with a withholding tax
certificate,” Zimra said in its letter dated 30 March.

It said the directive was effective from yesterday, a move which tobacco
farmers claimed was part of the skint government’s plans to raise money to
pay civil servants their bonuses.

“We view this as a desperate attempt to raise money by government to pay
civil servants the bonuses it promised them,” one farmer told the Daily
News.

Last month, the government agreed to pay bonuses to its bloated workforce,
following threats of industrial action by union leaders.

While the government has agreed to pay the bonuses under a staggered plan,
it did not reveal how it is going to fund the 13th cheques, especially
after Finance minister Patrick Chinamasa had initially scrapped the
incentives, citing Treasury’s depleted coffers.

The government is experiencing a severe cash crisis which has seen it
failing to pay its civil servants on time, as the local economy continues
to die.

This week the government introduced a raft of new taxes targeting small
businesses such as driving schools, hair salons and commuter omnibuses.

Apart from having to contend with its ever depleting coffers, the
government is also struggling to contain rising public discontent over the
worsening shortages of cash and plummeting standards of living.

Mugabe and his warring ruling Zanu PF, in power since Zimbabwe’s
independence from Britain in 1980, stand accused of turning the once
thriving local economy, which at one time was regarded as the bread basket
of Africa, into a basket case.