Finance minister Tendai Biti has been forced to take steps to slash the shock 25 percent hike of surtax on imports of food and other basics.

Biti admitted at a news conference in Harare yesterday that he had come

under withering pressure from “various stakeholders” after publication of

the new import tariff regime in the January 14 edition of the Daily News.

The new tax regime came into force on January 1, 2012.

The 25 percent surtax was imposed across the entire range of goods from

basics to luxuries, with the new import regime affecting almost everything

from second-hand vehicles to food, even beer and cigarettes.

The new duty regime was announced in the 2012 national budget presented by

Biti to Parliament in November last year as a measure to support increased

domestic production and level the playing field with regards to some of the

imported commodities.

When the new tariff regime was gazetted last week by the Zimbabwe Revenue

Authority, they torched a storm, which has forced the minister into a

dramatic climb-down.

“Concerns have been raised by stakeholders over some of the tariff measures

government implemented from the 1st of January 2012,” Biti told reporters

yesterday.

“Here there are two things. First is the expanse of those tariffs, the

expanse of the goods that are affected by those tariffs, there have been

concerns about those.”

The 25 percent surtax covers literally everything from beauty products to

electrical household appliances such as refrigerators, ovens, cookers and

other reception apparatus for TVs.

The surtax more importantly affects a wide array of basic foodstuffs such as

fresh as well as frozen whole chickens, frozen cuts and offal, milk and

cream, yoghurt, fermented milk, buttermilk, cheese, bird’s eggs, potatoes,

tomatoes, onions and shallots, garlic, carrots and turnips, mixtures of

vegetables, peas, beans, sausages, uncooked pasta, jams, fruit jellies,

marmalades, soup and broth preparations, sweet biscuits, tomato ketchup and

other tomato sauces.

The new regime also affected alcoholic beverages such as malt beer, wine,

ciders, brandy, whiskey, vodka, spirits as well as Virginia flue-cured

tobacco and burley tobacco.

Biti said he had taken heed of concerns from economists and other

stakeholders that the hike will trigger a massive inflation surge and that

it could ignite shortages of basics given depressed local supply side

constraints.

“We have listened to the way they are affecting basic commodities and so

forth,” Biti said.

The tough-talking minister blasted the manner in which the new tariff

measures were being implemented by tax collector Zimra.

“We have women being asked to put on new shoes, bags being opened (at the

border) and so forth. We don’t accept that, it is not the law,” Biti said.

“Public servants, parastatals, have got a duty to respect the public; they

have got a duty to respect citizens of this country. We will not accept

that.”

The inhuman treatment of travellers by Zimra officials at several border

posts including Harare International Airport was exposed by the Daily News

through a series of articles.

Biti admitted there was overwhelming national condemnation of the 25 percent

hike in surtax of second-hand cars and basics.

“Given the huge representations that have been made to us as a ministry, we

have embarked on the process of stakeholder consultation so that we review

or adjust those statutory instruments, the appropriate measures to review,

and some of the measures therefore will be instituted in the next few weeks

or few days if we are lucky,” Biti said.

“But I want to appeal to the Zimbabwe Revenue Authority, I want to appeal to

all government bodies that provides services to the people whether it’s the

passport office, whether it’s the death certificate office, whether its VAT,

the government is there to serve the public, public servants are there to

serve and not to be islands of fascism where we harass people and so forth.

“So we don’t accept what certain officials at the Zimbabwe Revenue Authority

have been doing.”

Biti said he had received several complaints from trans-border traders and

other stakeholders of intrusive searches and other bizarre methods of

enforcing his new regulations at the border.

“That is not the policy of this ministry, that is not the policy of this

government,” he said. “The long and short of it is that we will review and

adjust following a process of consultation. We will make announcements

through the relevant statutory instrument.”

Biti has also introduced a controversial ban of imports of second-hand

underwear that has also attracted massive criticism.

New Taxes

HARARE - Food prices and other basic commodities are set to increase

following an announcement by the Zimbabwe Revenue Authority that a 25
percent surtax would be charged on the commodities starting January 1.

The development follows disclosures that government officials, including
ministers, were bringing commodities into the country without paying duty.

This includes luxury motor vehicles and even food.
The surtax, according to Zimra, will be charged on things such as food
stuffs, second-hand light passenger motor-vehicles which are more than five
years old from the date of original manufacture, and many other commodities.

Reads the notice in part: “...Surtax of 25 percent of the value for duty
purposes shall be charged and paid in respect of the importation into
Zimbabwe.
“Included in the goods to be taxed are double cab vehicles for the transport
of goods, foodstuffs such as fresh, chilled as well as frozen whole
chickens, frozen cuts and offals, milk and cream, yoghurt, fermented milk,
buttermilk, cheese, bird’s eggs, potatoes, tomatoes, onions and shallots,
garlic, carrots and turnips, mixtures of vegetables, other vegetables, peas
(excluding garden peas and marple peas), beans, sausages and similar
products, uncooked pasta, jams, fruit jellies, marmalades, soup and broth
preparations, sweet biscuits, tomato ketchup and other tomato sauces,” the
notice added.

Alcoholic beverages such as malt beer, wine, cider, brandy, whisky, vodka
and spirits will also attract surtax.
Smokers will not be spared either as virginia type flue-cured tobacco,
burley tobacco as well as all other tobacco types will be taxed.

Other products that will be attracting surtax range from beauty products to
electric household equipment such as refrigerators, ovens, cookers and other
reception apparatus for television sets.
Economic analyst John Robertson said the move by Zimra will trigger massive
price increases which will increase inflation.
Robertson said; “It will add to the cost of those things unless if we can
produce them ourselves.
A lot of these goods are not being made in the quantities needed by the
country and in most cases we can’t find them in our local shops because we
do not have the machinery to make them.

Power cuts are also negatively affecting our manufacturing industry and we
have experienced a loss of skilled people.”
He added: “We will see an increase in the price of buying these goods and it
is going to affect inflation first and in the next two years we might see a
positive result in that we might be able to produce our own products but
this will be in the long run.”

Air Zimbabwe

Zimbabwe’s national airline is in the headlines again this week after the only plane still operational was grounded, due to technical faults. This continues a very troubled season for the management who are facing strong criticism for the financial failings at Air Zim.


Flights from Harare to Bulawayo and Victoria Falls were reportedly cancelled on Monday when the Boeing 737 aircraft developed a “glitch” in one of the engines, leaving passengers stranded.

Air Zim’s acting chief executive officer, Innocent Mavhunga, and board chairperson Jonathan Kadzura, have so far made no comment regarding the airline’s future. It is believed debts of at least $140 million are outstanding.

According to Newsday newspaper, the broken down plane could not be fixed because workers are currently on strike over unpaid salaries. A source reportedly said that most workers had not been paid for nearly six months.

Political and economic analyst Bekithemba Mhlanga told SW Radio Africa that blame for the airline’s demise “should be placed squarely on Robert Mugabe and the board of directors”. He referred to Mugabe’s constant use of the airline for personal trips and mismanagement by the board as the major reasons.
“We’ve reached a point where there should be either civil action or criminal liability against the management for their part in terms of how we got to this position,” Mhlanga explained. He added that the board never had a plan of action and should have forced privatization of the airline years ago.

A crisis developed a week before the holidays last month when creditors seized a plane at Gatwick Airport in London because Air Zim had failed to pay $1.5 million owed to an American spare parts company. Hundreds were stranded for over a week at the airport.

Earlier in the week Transport Minister Nicholas Goche ordered all its regional and international flights to be suspended, fearing seizure of the remaining aircraft by creditors.