Have respect for rule of law: CZR

• Calls for dialogue between CZR, Govt
• Blasts decision to backdate VAT collection

By Joseph Murambiwa

Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu has criticised a decision by the Zimbabwe Revenue Authority (Zimra) to collect VAT (value added tax) – currently charged at 14.5 percent – on rice imports.
The tax affects rice packages of 25kgs and below, and is being backdated to February 2017.
In a press statement Monday, the union’s president said effecting the decision is not only a violation of property rights, but has adverse effects on the economy.
CZR also said Rice was a staple food hence does not qualify to be charged VAT, adding that low income families would be affected the most.
“Effecting the decision is not only a violation of property rights but a direct act on any confidence the business sector had on the economy. We believe that for this economy to attract both foreign and local investment there is need to have the respect for the rule of law and policy consistency.”
Mutashu also said the VAT directive undermined President Mnangagwa’s stance on business as enunciated by the “Zimbabwe is Open for Business” mantra.
“It is also important to note that it is illegal for Zimra to enforce collection of VAT on rice in retrospect … 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 charging will increase the price of this staple food which will affect low income families.”
Under the current law, Statutory Instrument (SI) 9 of 2016 rice is under exemption from paying VAT. The CZR President bemoaned lack of policy consistency, saying it had adverse implications.
“The decision by Zimra lays bare the need for policy consistency. Zimra was quiet for three years, not indicating that VAT was to be paid on rice. It is only recently that it has sought to collect the VAT which was previously and is still 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.”
CZR has asked for immediate dialogue with Government on the issue, which is deemed to be of national importance.
Meanwhile, the Ministry of Finance and Economic Development and the tax regulatory body seem to be in a quagmire over an appeal by rice dealers to repel the decision.
Secretary for Finance George Guvamatanga said dealers that sought the reversal of the directive should approach Zimra with a payment plan.
On the other hand Zimra has said it is its mandate to collect the taxes as it has a “directive” from the Government.
“The issue of VAT on rice has been discussed at various levels, in Zimra, and the Ministry of Finance, and addressed in terms of the existing laws.
“Parties that may want to continue pursuing the issue are advised to raise the matter with the Ministry of Finance and Economic Development given that the matters in question pertain to policy.”
In 2018, Zimbabwe imported 180 946 tonnes of rice. Nhau/Indaba