Basic goods, services exempted from value added tax

11 Feb, 2024 - 00:02 0 Views
Basic goods, services exempted from value added tax

The Sunday Mail

Sunday Mail Reporter

THE Government has exempted a number of goods and services from value-added tax (VAT), in a move that is likely to result in price reductions.

According to Statutory Instrument 15 of 2024, the goods and services covered under the new dispensation include water for domestic use, local authority rates, domestic electricity, some agricultural equipment and machinery, and sanitary wear.

Also exempted are some fuel and fuel products, ethanol fuel, road toll fees, tobacco, commission charges on tobacco sales, goods and services supplied by medical statutory bodies and secondary services by the National Pharmaceutical Company.

VAT is an indirect tax on consumption charged on the supply of taxable goods and services.

It is levied on transactions rather than directly on income or profit.

The tax is also levied on the importation of goods and services.

In Zimbabwe, VAT was introduced in 2004 to replace the former sales tax regime.

The Second Republic is presently working on measures to stabilise prices of goods and services.

Addressing the first Cabinet sitting of the year at State House in Harare on Tuesday, President Mnangagwa said the Government is implementing prudent fiscal and monetary policy measures.

“Prudent fiscal and monetary policies and the promotion of a conducive business environment remain critically important for the stability and growth of our economy,” he said.

“Accordingly, the fiscal and monetary authorities are implementing a raft of policy measures to arrest price increases, stabilise the foreign exchange rate, maintain the value of our currency and ultimately encourage savings.”

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