The Confederation of Zimbabwe Retailers (CZR) president yesterday released a statement dismissing the directive by Treasury to the Taxman ZIMRA to collect backdated value-added tax from importers of rice weighing 25KGs or less since 2017, New Zimbabwe reports.
A statement released by CZR’s President Denford Mutashu said the directive was illegal:
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…the VAT exemption for rice set out in Statutory Instrument (SI) 9 of 2006, but was amended in 2017.
…the effect of the repeal was to restore the position set out in SI 9 of 2016 that all rice (including prepacked rice in packages or less than 25kg) was VAT exempt.
The decision by ZIMRA lays bare the need for policy consistency. ZIMRA was quiet for three years, not indicating that VAT was to be collected on rice. It is only recently that it has sought to collect the VAT which was previously and still is exempt,” argued Mutashu.
We wish to point out that it is an established principle of law that no tax can be imposed on a party, unless the same is clearly set out in legislation. At present, the law is that rice is exempt from VAT and even the ZIMRA system has not been and is presently not charging VAT.
…effecting the decision was not only a violation of property rights, but a direct act on any confidence the business sector still had in the economy with a negative impact on the rule of law and policy consistency.
Treasury deputy chief George Guvamatanga had contended that the measure to backdate VAT for importers was aimed at supporting the local packaging industry through promoting repackaging of cheaper bulk rice into smaller units.
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