Sugar tax will lead to 8 000 job cuts in the sector - CZI

By Own Correspondent

THE newly introduced Sugar Tax is set to prompt around 8 000 job cuts in the sector adding to more suffering for the already embattled country’s workforce.

The government of Zimbabwe introduced a sugar tax on sweetened beverages and a 15% VAT on refined sugar, which may have a slight effect on consumption, but the reinstatement of the import duty of sugar is expected to boost domestic sales for Zimbabwean sugar producers.

However, the CZI said the sugar levy is likely to disrupt the state of jobs in the country.

 “This will have implications in terms of employment in the beverage sector, which employs about 8 000 people and the whole sugar value chain which employs more than 30 000 people”.

Just recently, Ncube was forced to make changes to his measures on trading, VAT, and basic commodities.

Retailers now can buy from manufacturers as long as they are tax compliant while manufacturers can sell to informal traders, and a 5% withholding tax will apply.

Ncube also lowered the sugar tax on soft drinks.

“The (CZI) committee undertook an impact analysis on the implementation of some of the measures introduced through the 2024 budget, in particular with regards to tax compliance on route to the market, mitigation of consequences of the sugar on health through a special surtax, and a few tariff lines that were omitted on exemption from Value Added Tax, in order to cover the whole value chain that includes cotton and soya seeds to cooking oil,” Ncube said.

“We write to your office to express our deep concern over the 2024 National Budget announced by Ncube, which has strong traits of capitalism with tragic consequences to workers and the ordinary person.

“Hinged on brutal taxation, the budget has failed to rescue the already underpaid workers by pegging PAYE tax-free threshold to a paltry Z$750000-00 from 1 January 2024. A fair tax-free threshold in US$ was more sensitive and welcome to workers than this pittance which would be eroded to nothing before it even effected,” he said.

On its part, the ZCTU has since written to Parliament calling for the urgent abandonment of the national Budget blueprint.

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