Zimra blasts profiteering businesses

THE Zimbabwe Revenue Authority (Zimra) has accused some businesses of frustrating economic growth through high mark-ups and backed calls to review the country's production cost structure so as to boost economic growth.

Zimra board chair Mrs Willia Bonyongwe said yesterday there was an urgent need to address the pricing problem adding that most companies have failed the competitiveness test because of huge mark-ups on their products.

She said there was an urgent need for the nation to look at the local cost structures such as labour including executive packages, utilities and the myriad of levies.

"Profiteering is a local disease. Government must also seriously look into the mark ups of those who get licences to import goods. This is not a call for price control, but all these factors impact negatively on Zimbabwe's capacity to increase production and exports," said Mrs Bonyongwe.

"There is just no justification for the current excessive mark-ups on imported goods for fertilisers, chemicals and other inputs, equipment, even medicines.

"For example, following the aborted introduction on Value Added Tax (VAT) through Statutory Instrument 20 of 2017 on selected basic commodities, the prices were never adjusted after it was repealed."

The Zimra board chair said the high margins were one of the drivers of inflation. As a result, she said most local goods have dismally failed the import parity test due to high margins.

"There is a need to appreciate the value of the US dollar. If that is left unchecked, all strategies to increase production and exports will not succeed and it would be a case of throwing good money after bad," said Mrs Bonyongwe.

Economic experts and survey findings have recommended a downward review of production costs so as to make Zimbabwe competitive.