Business Reporter
Zimbabwe’s recent move to scrap Value Added Tax (VAT) on live animals and fish is expected to boost production in the fishing and animal husbandry industries.
Finance Minister Professor Mthuli Ncube made this decision primarily for public health reasons, as small butchers were opting for informal animal slaughter to avoid VAT.
“The Government is also training farmers and research officers to assist farmers so that we grow,” said Dr. Pious Makaya, Chief Director of the Department of Veterinary Services.
“We have already scrapped VAT on live animals. It’s effective right now, but we want to scrap more VAT imposed on animal-derived foods, which are also fish products.”
This change aims to reduce production costs, increase sales, and promote formal trade, ultimately boosting farmers’ incomes. Zimbabwe currently produces around 15,000 tonnes of fish, falling short of the national requirement of 60,000 tonnes. The government plans to increase production to 35,000 tonnes per year and eventually achieve self-sufficiency and export.
Key Benefits of VAT Scrapping:
- Reduced Production Costs: Lower costs will make local products more competitive globally.
- Increased Sales: Expected growth in sales, especially from licensed and inspected sectors.
- Job Creation: Significant job creation and improved nutritional value.
- Promoting Formal Trade: Encourages organized marketing and boosts farmers’ incomes.
Challenges Ahead:
- High Feed Processing Costs: Industry restructuring needed to address high costs.
- Lack of Legislation: Need for a framework governing fish production and aquaculture.
- Import Competition: Local products must compete with cheaper imports.
By addressing these challenges, Zimbabwe can achieve its Vision 2030 goal of becoming an upper-middle-income society.
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