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Captains Of Industry Say Suspension Of Duty Will Export Jobs And Choke Small Businesses

9 months agoMon, 15 May 2023 09:30:13 GMT
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Captains Of Industry Say Suspension Of Duty Will Export Jobs And Choke Small Businesses

Confederation of Zimbabwe (CZI) president Kurai Matsheza has said the recent suspension of import duty and import value-added tax (VAT) on 11 basic groceries by the Government will have a negative impact on the economy.

On Thursday, Finance and Economic Development Minister Mthuli Ncube announced several measures to stabilise the exchange rate and prices.

Among other things, Ncube scrapped import duty and import value-added tax (VAT) on selected products.

On Friday, Finance and Economic Development permanent secretary George Guvamatanga directed Zimbabwe Revenue Authority (ZIMRA) commissioner-general Regina Chinamasa to suspend import duty and import VAT on maize meal, rice, milk, flour, salt, cooking oil, sugar, petroleum jelly, toothpaste, bath soap and washing powder.

Speaking to NewsDay on Sunday, Matsheza said the move choke local manufacturers and was also tantamount to exporting jobs. He said:

Usanetseke neNetOne airtime.

Baya *405# utenge neEcoCash

The lifting of duties on the 11 products has more negatives than positives on the economy.

This measure means as a country we’re outsourcing the production of those products, hence exporting jobs.

While the intention is to protect the general consumer from the price increase, the general consumer will not be importing, it’s small businesses and big to some extent who will be importing and then retailing in US dollars.

This deepens dollarisation as basic goods will only be available in USD [supposedly at ‘low’ prices].

The announcement came after shops hiked prices of basic food items in response to the rapid weakening of the Zimbabwe dollar against other currencies.

The removal of import duty on products can result in lower prices for consumers and improved access to goods.

However, removing import duty may also have some negative effects such as loss of government revenue, adverse effects on domestic industries, and dependency on foreign producers.

More: Pindula News

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