VAT waiver on some basic food items is now in effect in Zimbabwe

Along with most other African states, Zimbabwe is battling with skyrocketing food inflation, which is tracking well ahead of incomes. Supermarkets, smaller grocery stores and even informal traders are also feeling the pinch as consumers cut back on spending. 

Angola for example, last week implemented a VAT reduction on essential food items, cutting the tax from 14% to 5%. 

In Zimbabwe’s case, though, some basic goods are completely excluded from 15% Value Added Tax. These include bread, milk, cooking oil, mealie meal, salt, sugar and flour. 

The exemptions were announced in January by Zimbabwe’s Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube, but only came into effect this month. 

Understanding of the basic necessities for households 

“The specific items covered under the exemption reflect a comprehensive understanding of the basic necessities for households,” says a statement published on the Marketers Association of Zimbabwe (MAZ) website.  

“By lifting the VAT on these essential food products, the government aims to ease the financial burden on citizens, ensuring that access to fundamental groceries remains affordable for all.” 

The statement continues: “This initiative aligns with the government’s commitment to supporting its citizens during challenging economic times, promoting social well-being, and fostering a stable environment for all members of the community.  

“As the VAT suspension takes effect, consumers can anticipate a positive impact on their household budgets, allowing for greater financial flexibility.” 

The website Trading Economics, citing the Reserve bank of Zimbabwe data, says the cost of food in Zimbabwe increased 60.3% in January of 2024 over the same month in the previous year.