Revenue measures review welcome: Economists
ECONOMISTS yesterday commended the government for reviewing the 2024 revenue measures on route to market, value-added tax and sugar content on beverages, saying the move will benefit the business and consumers.
On Monday, Treasury fine-tuned some of the measures introduced through the 2024 national budget.
Basic goods such as bread, milk, cooking oil, and maize were exempted from value-added tax.
Economic analysts told NewsDay Business that the government move would eliminate price increases that had gripped consumers.
“The initial pronouncements of insisting on the manufacturers selling to wholesalers strictly was going to disrupt the supply chain and the relaxation on that pronouncement is a very welcome move,” economist Stevenson Dhlamini said.
“There are some goods that do not follow the traditional supply chain that would not necessitate the need for a wholesaler. The exemption or the inclusion of basic commodities under the tax exemption schedule is also another welcome move because we appreciate that this year is already predicted to be a year where we are likely to have a drought.
“Therefore, anything that threatens to increase prices of basic commodities was going to be an unwise move with unintended consequences of undermining the welfare of the general citizens.”
Dhlamini said the new measures are now reflective of policy-making that is participative, as they are based on evidence on the ground.
He said the sugar tax will have a minimal impact because of this size of 0,01 per gramme.
“It will have very minimal impact on prices. These corrective measures are a welcome development, especially for industry and the general consumers,” he said.
“The general consumers will benefit, especially given that basic commodities have been cushioned from the potential price increases which would have grossly undermined the purchasing power,” he said.
In future, Dhlamini hoped that policy-making would be “more inclusive and more participatory” to avoid the inconsistencies of using statutory instruments to correct acts of Parliament.
Posting on microblogging site X (formerly Twitter), economist Tinashe Murapata said the 5% withholding tax was still too high and needed reviewing.
“The most critical element of the distribution value chain is the 5% withholding tax. I assume (that’s what the) Treasury wanted from the beginning. It’s ridiculously high and unnecessary,” he posted.
“Anyone who buys from a manufacturer beyond a certain dollar amount without tax clearance must pay a 5% withholding tax. End of story. But now they have meddled and muddied the distribution chain deciding on how business must operate. That is not Treasury duty.”-newsday
