VAT for agricultural inputs remains suspended in Zimbabwe

The Treasury has reaffirmed its decision to maintain the suspension of a 15 percent Value Added Tax (VAT) on agricultural inputs, implements, and produce. This initiative is part of a broader strategy to attract increased investment in infrastructure and irrigation projects across the country.

Finance Minister Professor Mthuli Ncube underscored the government's commitment to supporting agricultural growth during the Zimbabwe Irrigation Investment Conference. He emphasized the importance of these tax incentives in mitigating the impact of climate change on farming and in fostering the expansion of irrigation capabilities.

The tax incentives outlined by Minister Ncube encompass a wide range of agricultural equipment crucial for farm operations, including tractors, machinery for soil preparation, combine harvesters, and irrigation systems like centre pivots, sprinklers, and pumps. These measures are expected to stimulate investment in irrigation infrastructure, which plays a pivotal role in enhancing productivity and resilience against climatic challenges in Zimbabwe's agricultural landscape.

Stakeholders in the farming sector have welcomed the government's decision, viewing it as a significant boost for irrigation investments. Leaders such as Gary Grubb from Western Pivots Zimbabwe and representatives from farming unions like the Zimbabwe National Farmers Union and the Tobacco Farmers Union Trust have expressed optimism about the implications of these incentives. They believe that the removal of VAT on key agricultural inputs will not only attract more projects but also contribute to the long-term viability and growth of Zimbabwe's farming industry.

Furthermore, the Treasury has allocated substantial resources amounting to over ZWG$88 million this year to support irrigation sector initiatives. These funds are earmarked for projects such as irrigation system rehabilitation, dam construction, farm mechanisation, and technological advancements. This financial commitment underscores the government's proactive stance in promoting sustainable agricultural development and food security in Zimbabwe.

In conclusion, the suspension of VAT on agricultural equipment and inputs represents a pivotal policy move aimed at fostering agricultural expansion and resilience in Zimbabwe. By incentivizing investment in irrigation infrastructure and supporting farm mechanisation, the government seeks to enhance productivity, mitigate climate risks, and ensure long-term sustainability in the agricultural sector.