Home » General » ZIMBABWE SCRAPS TOBACCO TAX

HARARE, The Zimbabwe government has scrapped the 10 per cent tax it had announced just last week to be imposed on tobacco farmers without valid tax clearance certificates, Agriculture, says Mechanization and Irrigation Development Minister Dr Joseph Made.

Last week, the government introduced a variety of taxes targeting informal traders, transport operators and farmers, a decision which has been widely condemned, but unconfirmed reports indicate that farmers are refusing to sell their tobacco in protest over the new tax, arguing that it will erode their revenues, as they are already heavily taxed.

Made told the National Assembly Wednesday that the tax had been suspended following consultations with Finance Minister Patrick Chinamasa. He explained that the Zimbabwe Revenue Authority (Zimra) had effected the tax within the confines of the law, as provisions for its implementation already existed.

"I want to clarify that the law is very clear on that issue of what farmers must pay. Some years back, the payment that is supposed to be made by farmers was suspended in order to bring up the farmers and support them in producing tobacco. We made an appeal that the issue of payment of 10 per cent be suspended for now and this has been agreed to," he said.

Referring to disturbances reported in the morning, he said they were only confined to one auction floor but did not elaborate what caused the disturbances. "It is not true that tobacco is not being sold. What happened this morning was the issue of farmers at Boka auction floors but that has been resolved."

Made said farmers were getting their payments on time and the Reserve Bank of Zimbabwe stood ready to assist where challenges might emerge.

Tobacco is one of Zimbabwe's highest foreign currency earners, with more than 20 million kilogrammes worth 52. 5 million US dollars sold so far since the selling season started in March. This year, tobacco is being sold using the electronic marketing system to stop price collusion and sharing by buyers as well as other unscrupulous practices associated with the traditional way of buying tobacco.

Zimbabwe anticipates an output of 202 million kg of tobacco during the 2016/17 selling season.

Source: NAM NEWS NETWORK

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