Retailers should revert to prices they were charging before the last value added tax increase, and give space for talks between central Government and monetary authorities over raw material imports, a top industry official has said.
Over the weeks, supermarkets have been increasing prices of selected basic commodities on the back of a 15 percent VAT increase by Government.
Among the products caught up in the price adjustment are mealie-meal, cooking oil, sugar, meat, rice, fish and potatoes.
Although authorities have since scrapped that tax increase, many retailers are yet to revert to pre-VAT prices.
Confederation of Zimbabwe Retailers president Mr Denford Mutashu told The Sunday Mail, “We gave all the retailers a directive to return to the old prices as the 15 percent VAT which was levied on previously zero-rated products was scrapped last week.
“CZR is in full support of Government’s policies in promoting local industrialisation.
“Local products constitute 80 percent of all the products on shelves, and we are pushing to reach 100 percent in a few years to come.
“We want to see local companies receive maximum support and in the end export some of their products.
“Lastly, we thought that the Finance Ministry would have communicated directly to us about the suspension of the VAT as they previously did when they were introducing it.
“By virtue of not communicating directly, retailers are operating in a vacuum, and the ministry should directly come to us as some retailers pretend not to have heard about the reversal of VAT and continue with the inflated prices.”
Industry and Commerce Minister Dr Mike Bimha said his ministry was in talks with the Reserve Bank of Zimbabwe to prioritise industry in foreign currency allocation.
“Yes, it has become a big challenge (foreign currency shortages) and we have witnessed its effects, but we continue to engage the RBZ to improve foreign currency allocations to all the manufacturing companies to enable them to make quick payments for raw materials.
“We are having weekly meetings with the RBZ Governor (Dr John Mangudya) to improve the telegraphic transfers (foreign payments) of the companies which are importing raw materials.
“By so-doing, we know that raw materials arrive in time and there will be no need to increase prices unnecessarily.”
Dr Bimha added, “After all is said and done, we can only generate forex if we are exporting; we must facilitate for them to do that and we are working on it.
“Production, production is the only solution to this economy. . .We must export more otherwise we will continue to run in circles on issues like (price hikes and foreign currency shortages).”
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