The Zimbabwe National Chamber of Commerce is pushing back against the government's plan to bump VAT from 15 to 15.5 percent, saying companies will just pass costs straight to consumers and make inflation worse. The business group argues the tax hike lands at a terrible time since firms are already dealing with rising expenses and weak demand from households getting hammered by rising living costs.
VAT already pulls in nearly a quarter of total government revenue, and the chamber warns low-income and middle-income families will feel the increase hardest. Monthly inflation numbers showed some improvement in October, but annual rates stayed high at 82.7 percent for local currency and 13 percent for the dollar, which makes the timing sketch for adding more price pressure through retail taxes.
The treasury wants to raise an extra 1.47 billion dollars next year to hit a 9.4 billion dollar revenue target, up from 7.93 billion expected this year.
VAT already pulls in nearly a quarter of total government revenue, and the chamber warns low-income and middle-income families will feel the increase hardest. Monthly inflation numbers showed some improvement in October, but annual rates stayed high at 82.7 percent for local currency and 13 percent for the dollar, which makes the timing sketch for adding more price pressure through retail taxes.
The treasury wants to raise an extra 1.47 billion dollars next year to hit a 9.4 billion dollar revenue target, up from 7.93 billion expected this year.
