Freedom Mashava, Visuals Editor 
THE Confederation of Zimbabwe Retailers (CZR) says the decision by the Zimbabwe Revenue Authority (Zimra) to collect 15 percent Value Added Tax (VAT) on rice backdated to 2017 has serious ramifications on the retail sector.
Denford-Mutashu, Confederation of Zimbabwe Retailers president
This comes as the tax collector directed suppliers and packers of 25kg or less to pay 15 percent VAT, despite the then minister of Finance, Patrick Chinamasa’s SI 26A of 2017, exempting businesses from paying the levy.
“The decision by the Zimbabwe Revenue Authority (Zimra) lays bare the need for policy consistency. Zimra was quiet for three years, not indicating that VAT was to be collected on rice. It is only recently that it has sought to collect the VAT which was previously and still is exempt.
“We wish to point out that it is an established principle of law that no tax can be imposed on a party, unless the same is clearly set out in legislation. At present, the law is that rice is exempt from VAT and even the Zimra system has not been and is presently not charging VAT,” Denford Mutashu, CZR president said.
In 2004, suppliers of rice were being charged the 15 percent VAT until it was zero-rated in 2009.
The tax was then briefly reintroduced in 2017, before Chinamasa scrapped it again.
“Effecting the decision is not only a violation of property rights but a direct act on any confidence the business sector had in the economy.
“We believe that for this economy to attract both local and foreign investment there is a need to have respect for the rule of law and policy consistency.
“It is also important to note that it is illegal for Zimra to enforce collection of VAT on rice in retrospect and as well as currently as the law does not provide for it. More importantly it is morally incorrect to attempt to charge VAT when rice is a staple food and we believe that the tax will increase the price of this staple food, affecting low-income families,” he said.
In a letter dated October 22, 2020 directed to Deloitte and Touche, Finance ministry secretary George Guvamatanga said the reintroduction of VAT on rice was meant to support the local packaging industry through promoting repackaging of cheaper bulk rice into smaller units.
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