Rice dealers seek minister intervention on VAT

PLAYERS in the rice supply chain are seeking Finance minister Mthuli Ncube’s intervention on policy inconsistencies in the payment of value-added tax ( VAT) on rice.

Rice was exempted from paying VAT in 2017 by the then Finance and Economic Development minister Patrick Chinamasa in a bid to stabilise the price of the basic commodity.

However, suppliers and packers of 25kg bags or less have received demands for VAT payment dating back to 2017 from the Zimbabwe Revenue Authority.

All retailers and players in the supply chain including the Grain Marketing Board have not been charging VAT since the exemption order was pronounced by the then minister in 2017.

The Grain Millers Association of Zimbabwe (GMAZ) and the Confederation of Zimbabwe Retailers requested an urgent meeting with the minister to resolve the issue.

In a statement, GMAZ acting general manager Garikai Chaunza said the outcome of the meeting would determine whether or not the dealers would pay backdated VAT.

“We are hopeful that these discussions will be successful and these issues will be solved amicably. In the meantime, we kindly encourage our membership to wait for the outcome of these discussions and refrain from litigation,” he said.

Dealers, however, have warned that reinstating VAT on rice would result in a price increase beyond the reach of ordinary citizens.

They also argue that if backdated VAT payment is approved, some companies will go into liquidation as accrued amounts will be too much.