Massive food price hike looms

Government has introduced Value Added Tax (VAT) on nearly 40 imported basic food commodities that constitute the bulk of the consumer bread basket.

These commodities have previously been excluded from the 15 percent tax.

This tax, which is likely to increase the cost of food, was effective from February 1.

A notice in the Government gazette on January 22, showed amendments to the VAT Act by minister Chinamasa, which repealed clauses that until now had allowed the imported food commodities to be taxed at zero rate.

Goods used or consumed for agricultural purposes are also included. This move is meant to protect local goods from the influx of cheaper imports flooding the market.