The Sunday News
Ngonidzashe Chiutsi Business Correspondent
NEW taxes introduced by the Government are untimely and set to burden the struggling local industry, tax experts and business operators in Bulawayo have said.
Finance and Economic Development Minister, Cde Patrick Chinamasa, in his Mid Term Review statement two weeks ago announced a raft of new tax measures to boost revenue collection to finance a number of Government programmes.
Speaking last week in Bulawayo during a Zimbabwe National Chamber of Commerce 2015 pre-budget consultative meeting, captains of industry said although they appreciated that the Government was in dire need of money, the method being used would burden the already struggling companies and people.
Bulawayo Tax Advisory Services principal tax consultant, Mr Peter Mgodi, said the increased taxes were going to affect the companies that were already struggling to remain afloat.
“The tax administrators are putting more and more taxes on a struggling economy for example the exercise duty on airtime and more toll fees. Continuous placing of more and more tax burdens on already struggling taxpayer,” said Mr Mgodi.
He said companies were coming from a 2008 economic crisis and were yet to recover.
“We are coming from 2008 where we were at zero and the tax administrators are not giving a chance to companies to rise up. They don’t want to have the economy fully recover so that they will be able to get more taxes,” said Mr Mgodi.
Tetrad Investment Bank official, Mr Innocent Masauti, also echoed similar sentiments and said the high taxes introduced were tantamount to killing the goose that lays the golden egg.
“High taxes and other levies imposed an extra burden on surviving companies and have contributed in loss of morale to operate business. The aftermath of failing to settle these has resulted in firms being garnished and the result has been lost production hours as firms strive to comply,” he said.
He called on the Government to introduce tax sabbaticals and boost the fortunes of the ailing industries.
Telecel regional manager, Mr Nelson Chipangamate, said as mobile operators, the proposal to levy excise duty of five percent on airtime for voice and data was going to affect them.
“The new excise duty on airtime is going to affect us in a big way and we are going to increase the price of our services,” said Mr Chipangamate.
He added that even those in the downstream industry such as vendors were also going to be affected as the number of people who buy airtime was likely to go down.
He said increasing tax on airtime would not naturally increase revenue but revenue could actually go down as the number of people who buy the airtime may also decrease.
Mr Chipangamate said it was important for the relevant ministry to consult before coming up with their decisions.
Some of the measures taken by the Government include an upward review of fuel tax, employee benefits, meat and detergents.
Cde Chinamasa said the new taxes were necessary as the Government faces a challenge to raise additional revenue to finance its operations.
He increased excise duty on diesel and petrol from 25 cents and 30 cents per litre to 30 cents and 35 cents per litre respectively.
The minister also announced an increase in customs duty of up to 60 percent on vehicle imports.
