HARARE – President Robert Mugabe’s stone-broke government has imposed a new 10 percent tax on tobacco sales, prompting angry farmers to threaten to withhold their crops for the current marketing season.
This comes as impoverished Zimbabweans are reeling from a wave of other additional taxes that the government has recently imposed on them, including the shocking hiking of traffic fines, the taxing of commuter omnibuses and hairdressers.
Reacting to Thursday’s directive from the Zimbabwe Revenue Authority (Zimra), which caught most of the tobacco growers unawares, the irate farmers savaged the government for the move.
“I think it’s not fair on the part of tobacco farmers. Why just tobacco and not other crops? This will add to the burden on farmers in paying rents and debts,” the Zimbabwe Tobacco Association’s agricultural manager, Casper Mlambo, told the Daily News yesterday.
“Moreover, there are other levies that are already paid by farmers. This 10 percent will impact more widely on the smallholder farmers. I don’t know why they have done this, but we will continue engaging them (the government) on this as 10 percent is a lot of money,” he said.
Scores of affected farmers held an emergency meeting in Harare yesterday, where they warned that the government’s decision would disrupt the 2017 tobacco marketing season.
In its Thursday directive, Zimra ordered the Tobacco Industry and Marketing Board (TIMB) to withhold 10 percent of gross sales from every farmer who does not have a valid tax clearance certificate.
“Please be advised that in terms of section 80 (2) of the income tax Chapter 23:06 as quoted below: ‘subject to this section, unless a payee furnishes the paying officer with a tax clearance certificate, the paying officer shall withhold 10 percent of each amount payable to the payee under the contract concerned, and shall remit each amount so withheld to the commissioner on or before the 10th day of the month following that in which payment was made’.
“In this regard, you are requested to comply with the above instruction by withholding 10 percent from each supplier who does not have a valid tax clearance certificate and issue the supplier with a withholding tax certificate,” Zimra said in its letter dated 30 March.
It said the directive was effective from yesterday, a move which tobacco farmers claimed was part of the skint government’s plans to raise money to pay civil servants their bonuses.
“We view this as a desperate attempt to raise money by government to pay civil servants the bonuses it promised them,” one farmer told the Daily News.
Last month, the government agreed to pay bonuses to its bloated workforce, following threats of industrial action by union leaders.
While the government has agreed to pay the bonuses under a staggered plan, it did not reveal how it is going to fund the 13th cheques, especially after Finance minister Patrick Chinamasa had initially scrapped the incentives, citing Treasury’s depleted coffers.
The government is experiencing a severe cash crisis which has seen it failing to pay its civil servants on time, as the local economy continues to die.
This week the government introduced a raft of new taxes targeting small businesses such as driving schools, hair salons and commuter omnibuses.
Apart from having to contend with its ever depleting coffers, the government is also struggling to contain rising public discontent over the worsening shortages of cash and plummeting standards of living.
Mugabe and his warring ruling Zanu PF, in power since Zimbabwe’s independence from Britain in 1980, stand accused of turning the once thriving local economy, which at one time was regarded as the bread basket of Africa, into a basket case.