Government gazettes law for the removal of 15% VAT on chickens and other goods.

In a move that has brought sighs of relief to many, the government yesterday announced the gazetting of a new Statutory Instrument (SI)  which seeks to exempt chickens, beef, fish, rice, potatoes, margarine and mahewu from being charged Value Added Tax (VAT) of 15%.

The new law effectively suspends Statutory Instrument 20 of 2017 gazetted early this month by the Minister of Finance allowing the charging of 15% VAT on previously zero VAT-rated products.  According to the Minister, the rationale for introducing this new tax was to broaden the tax base and minimise the cost of tax administration. The move was was however met with mixed reactions from consumers and traders.

In a press statement published yesterday in the local media by the Minister of Finance Patrick Chinamasa, the new Statutory Instrument will be effective from the 16th of February 2017. Consumers are therefore not to be charged VAT on these products.

It however remains to be seen if traders who had already started charging 15% VAT will reduce  their prices following this directive.

To access the full press statement, please click the link below:

Press Statement by the Ministry of Finance and Economic Development on Status of VAT on Basic Products.

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