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Zimbabwe Government Orders Consumer Price Rollback - But To Limited Effect

A Zimbabwean government directive ordering reductions of as much as 50% in the prices of key goods was met Tuesday with patchy compliance around the country and sent consumers on a buying spree in larger outlets where the order was obeyed.

Trade Minister Obert Mpofu, heading a ministerial anti-inflation task force, ordered through the state-controlled Herald newspaper and other official media that prices of basic commodities including transport and newspapers be halved immediately.

Large retailing outlets like TM Supermarket, Spar and OK cut prices as ordered, which spurred a rush by consumers to stock up on maize meal, sugar, milk and salt, quickly emptying shelves amid speculation much stock had gone into store back rooms.

A special enforcement group led by the Central Intelligence Organization checked compliance, but this was patchy among small retailers in Harare and other cities, and in rural areas. Sources said transport operators also defied the directive.

Harare consumer Taurai Moyo told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that most basic goods disappeared from shops in a few hours.

Harare-based Management Solutions Director Luxon Zembe, a former president of the Zimbabwe National Chamber of Commerce, said Harare’s move to roll back inflation by fiat was counter-productive and unsustainable.

Elsewhere, the government said it would raise the income level under which no tax will be levied. As of July 1, the tax floor will rise to Z$1.5 million (US$10) from Z$100,000 (US$0.80) a month. Those earning between $1.5 million and $5 million dollars will pay a 20% tax, while the rate on monthly incomes over Z$5 million will be 47.5%.

The Zimbabwe Congress of Trade Unions called the fiscal policy move a non-event, noting that the nontaxable bracket is far beneath the poverty line which it currently sets at $6.7 million, or about US$45.

Union Secretary General Wellington Chibebe told reporter Jonga Kandemiiri that his union, Zimbabwe's largest, intends to push for an even higher tax-free threshold.

In other economic news, a survey by the Mass Public Opinion Institute found that most Zimbabweans believe they are living in poverty due to an economic meltdown which they blame on poor governance - but have devised coping strategies.

From Bulawayo, correspondent Netsai Mlilo reported.

More reports from VOA's Studio 7 for Zimbabwe...