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Zimbabwe Suspends Import Duty on Basic Commodities Amid Crippling Inflation, Economic Stagnation

FILE: A bus carrying a lot of goods traveling from Johannesburg to Harare.

The Ministry of Finance has authorized the suspension of duty on commodities including cooking oil, maize meal, toothpaste, bath soap, rice and others in an attempt to ensure that people with access to “free money” can purchase them from different nations.

In a letter written to a Ms. R. Chinamasa, Acting Commissioner General of the Zimbabwe Revenue Authority (ZIMRA), Finance Secretary George Guvamatanga said the measures are in line with an announcement made recently by Finance Minister Mthuli Ncube, who said the move is designed to ensure that Zimbabweans have access to affordable basic commodities.

Guvamatanga said other goods that can be imported duty free are flour, margarine, salt, sugar, milk powder, infants milk formula, tea, petroleum jelly, laundry bar and washing powder.

He said ZIMRA is requested to “urgently draft the necessary legal instrument and implement the duty suspension beginning midnight, that is 17 May 2022, which should coincide with the gazetting of the relevant legislation.

“Furthermore, the Ministry of Industry and Commerce is expected to compliment the measure through inclusion of the above goods on the Open General Import Licence.”

Zimbabwe lowered import tariffs in an effort to allow people to buy basic commodities in neighboring nations amid an economic downturn fueled by the devaluation of the local currency.

Ncube said this is designed to improve people’s access to affordable basic commodities.

“To further ensure that citizens have access to affordable basic commodities, in the face of recent substantial price increases in shops, the government hereby opens up imports of basic commodities by citizens, through the lowering of import tariffs and other accompanying measures. This is with immediate effect. Those with free funds are, with immediate effect, permitted to make use of these funds and other resources to import basic commodities.”

Ncube said the government has also introduced incentives for maize deliveries to the state-owned Grain Marketing Board (GMB)

“In the quest to incentivize farmers and encourage early deliveries of maize and other grains to the Grain Marketing Board, government has taken the decision to pay the maize farmers 30% of the amount due on grain delivered in United States Dollars and 70% in domestic Zimbabwe dollars. The US Dollar payment will be calculated by the Reserve Bank of Zimbabwe on the date of delivery. The payments will be backdated to the date of the first deliveries of this season’s maize to GMB.”

He said government has been seized with various initiatives aimed at stabilizing the economic, contain inflationary pressures, and “therefore to restore the purchasing power of the local currency, with the primary goal being to increase the domestic and external competitiveness of the economy, create and preserve jobs, improve livelihoods whilst limiting damage to the economy particularly in the face of the COVID-19 pandemic and more recently, the impact of the geo-political tensions in eastern Europe.”

The government recently banned banks from giving people and companies loans in an attempt to contain the rapid devaluation of the Zimbabwe dollar.