News / National
Grain millers warn of rice price hike as VAT threat looms
20 Feb 2024 at 03:48hrs | Views
The Grain Millers Association of Zimbabwe (GMAZ) has issued a warning that the price of rice in Zimbabwe could increase from US$2 to US$3 if Finance Minister Mthuli Ncube does not reverse the 15% Value Added Tax (VAT) introduced earlier this month. The announcement came following the release of Statutory Instrument 15 of 2024 on February 9.
In a statement, GMAZ President Tafadzwa Musarara expressed concerns that the imposition of VAT could have unintended consequences on the domestic rice market. Musarara highlighted that the tax could lead to an increase in the cost of 2kg rice to US$2.30 or US$2.40, with retailers potentially pricing it as high as US$3 due to exchange rate complications. This potential price hike is expected to impact consumer spending significantly.
Moreover, Musarara cautioned that the introduction of VAT could pave the way for cheaper, VAT-free rice imports from South Africa to flood the Zimbabwean market. He emphasized the risks of this scenario, noting that it may lead to the dominance of imported rice over locally processed rice, posing a threat to 2,800 local jobs in the rice sector and rendering existing infrastructure redundant.
With rice being the second most preferred food in Zimbabwe, according to GMAZ, with a monthly consumption of 15,000 metric tonnes, the inflation of prices due to VAT could have far-reaching implications on public health. Musarara stressed the nutritional advantages of rice over maize-meal, highlighting its lower fat content, cholesterol-free nature, and high fiber content. Additionally, he underscored the significance of rice in promoting stable blood sugar levels and supporting individuals with gastrointestinal health challenges.
As consumption of rice is projected to surge to 22,500 metric tonnes by 2028, Musarara urged the government to reconsider the imposition of VAT on rice to prevent adverse effects on both the economy and public health in Zimbabwe.
In a statement, GMAZ President Tafadzwa Musarara expressed concerns that the imposition of VAT could have unintended consequences on the domestic rice market. Musarara highlighted that the tax could lead to an increase in the cost of 2kg rice to US$2.30 or US$2.40, with retailers potentially pricing it as high as US$3 due to exchange rate complications. This potential price hike is expected to impact consumer spending significantly.
With rice being the second most preferred food in Zimbabwe, according to GMAZ, with a monthly consumption of 15,000 metric tonnes, the inflation of prices due to VAT could have far-reaching implications on public health. Musarara stressed the nutritional advantages of rice over maize-meal, highlighting its lower fat content, cholesterol-free nature, and high fiber content. Additionally, he underscored the significance of rice in promoting stable blood sugar levels and supporting individuals with gastrointestinal health challenges.
As consumption of rice is projected to surge to 22,500 metric tonnes by 2028, Musarara urged the government to reconsider the imposition of VAT on rice to prevent adverse effects on both the economy and public health in Zimbabwe.
Source - Byo24News
