HARARE – “Zanu PF has successfully turned the majority of us into vendors, now they want to convert everyone into vegetarians,” joked 25-year-old Privilege Mawaya.
This comes after the government decided to introduce a 15 percent value added tax (Vat) on several basic foodstuffs with effect from February 1, 2017.
The new tax, under Statutory Instrument 20 of 2017, affects basic commodities such as beef, fish and pork, and staple foods such as cereals, rice, potatoes and margarine.
Opposition Movement for Democratic Change (MDC), slammed the Vat hike.
“This is an anti-people statutory instrument which will make it hard for the poor to afford meat,” MDC spokesman Obert Gutu said.
“The regime is bankrupt and scrounging for money to pay a bloated civil service and to pay for (President Robert) Mugabe’s extravagant lifestyle.”
In the past few weeks, prices of beef skyrocketed to $7 per kilogramme (kg) from an average of $4,50 per kg in October, while chicken now costs an average of $8 per 2kg, with consumers now being forced to fork out more.
Confederation of Zimbabwe Retailers president Denford Mutashu said the introduction of the new tax regime was pushing the price of basic food beyond the reach of many.
“The increase in meat price has to do with the 15 percent Vat. This is a high mark-up on any product and retailers who operate on five to 10 percent mark-up. Retailers will then pass on the costs to the consumer,” he said.
Statistics from the Consumer Council of Zimbabwe (CCZ) show that the cost of living for a family of six increased by $12,55 from a December 2016 figure of $577,97 to $590,52 by January this year.
With the introduction of the new tax regulation, the cost of living is likely to increase further this year, putting a strain on the country’s urban low income earners and the poor.
“Consumers are likely to shift towards informal retailers where the tax collector’s hand is not present,” said local analyst Walter Mandeya, adding that formal outlets are likely to lose out as they will be forced to charge VAT.
As Zimbabwe’s national coffers are quickly dwindling and the ruling party constantly embroiled in nasty and deadly factional fights to succeed the aging Mugabe, the economy has been the number one casualty.
Mugabe blames sanctions imposed on his regime by the West for the country’s economic woes while critics blame the nonagenarian’s populist policies, corruption and general mismanagement of the country’s resources.