Govt prioritises funding, tax rebates for agriculture

Source: Govt prioritises funding, tax rebates for agriculture | Sunday News (Business)

Judith Phiri, Business Reporter
THE Government is set to avail part of the money disbursed by the International Monetary Fund (IMF) as Special Drawing Rights (SDR) to prop up the agriculture sector and build the momentum created by the bumper harvest that the country recorded last summer season.

The country last month received the equivalent of US$961 million in SDR from IMF, as part of the US$650 billion the international financial institution distributed to its members. As one of the prioritised expenditure, agriculture is set to benefit from the SDR funds, as the country journeys towards the farming season.

Addressing delegates at the Zimbabwe International Trade Fair (ZITF) Business Conference in Bulawayo last week, Finance and Economic Development Minister Professor Mthuli Ncube said the target will be on export focused activities.

“For utilisation of the SDRs, in order to diversify the agriculture sector, an export revolving fund will be established. The fund will target areas such as floriculture, blueberries and macadamia, among others. Support will also be channelled towards smallholder farmer irrigation schemes,” he said.

Despite the Covid-19 pandemic, the Government projects that the economy will this year grow by 7,8 percent buoyed by a massive 34 percent growth in the agriculture, energy (14 percent), manufacturing (7 percent) and mining sector (5 percent).

In terms of tax incentives, Prof Ncube said there were specific incentives that businesses and potential investors could benefit from in agriculture sector.

“There is an income tax for farmers special deductions. Investors into farming are allowed full deduction of expenditure incurred on fencing, clearing and stumping lands, works for prevention of soil erosion, boreholes, wells, aerial and geophysical surveys and restocking allowance.”

For customs duty, Prof Ncube said there is a rebate of duty on materials used in the preparation and packaging of fresh produce for export. In terms of the value added tax, he said most farm inputs such as animal feed, animal remedy, fertiliser, plants, seeds and pesticides and equipment or machinery used for agricultural purposes are zero rated for Value Added Tax (TAX) purposes.

“While for deferment of collection of VAT on the importation of capital goods, value added tax can be deferred on some capital equipment for the exclusive use in agricultural sector whose investment generally relies on imported capital.”

Meanwhile, maize deliveries to the Grain Marketing Board (GMB) have surpassed 900 000 tonnes for the period April to date, compared to the 138 000 tonnes of grain received over the same period last year. Notably, authorities are still hopeful of hitting the 1,8 million tonnes target, as more farmers appear to be more confident about the next agricultural season, following the drought that parched the country in 2020.

Grain Marketing Board (GMB) chief executive Mr Rockie Mutenha is on record saying that as the marketing season starts from 1 April of each year to 31 March of the following year, they were well on course as they are still receiving grain from farmers.

He said the ongoing grain intake season was proceeding well compared to the same period last year. The 1,8 million tonnes was what the Government has projected would be delivered to the national solos. But total national production is estimated at 2,8 million tonnes, three times higher than 900 000 tonnes produced a year earlier.