Government has shelved the Statutory Instrument (SI) 20 of 2017 for further consultation.
Statutory Instrument (S)I 2O which was gazetted on the 1st of February 2017 Introduced a Value-Added Tax of 15 percent on meat and cereals products.
Zimbabwe Farmers’ Union as the voice of the farmer has welcomed the suspension of the SI for further consultation.
“It’s a welcome move that the government has shelved the SI 20 of 2017 because there wasn’t enough consultation,” said ZFU chief Economist Mr. Prince Kuipa.
Consultation will enable policy makers to make informed decisions and ZFU as the voice of the farmer will be interested to give its input and hopefully the SI will be repealed.
The introduction of VAT on meat products will affect the meat value chain because demand will fall due to increased prices.
VAT will put pressure on processors to discount livestock producer prices and so the farmer’s viability will be negatively affected since the prices of stock feed are already high.
“We are most likely going to see low through put volume, that is, no sufficient volumes coming from farmers to the abattoir and this might negatively affect the processing industry,” said ZFU Livestock Economist Kudakwashe Munyanyi.
In that regard, SI 20 of 2017 might kill the processing industry leading to unemployment due to retrenchments.
There might also be a rise of informal activities creating a scenario for opportunist middleman to harvest where they have not sown.
Informal markets mean a lot of unregulated meat which might compromise on the health of the public.
Regional prices for meat are comparatively better than those for Zimbabwe and so adding a VAT on meat products might encourage the smuggling of meat from neighboring countries.