Zimbabweans have been complaining about the rising cost of living
Zimbabwe’s government has suspended the 15% tax, known as VAT, imposed on basic foodstuff, including rice, potatoes and meat, following a public outcry.
Finance minster Patrick Chinama took the decision after businessmen and suppliers took advantage of the tax’s introduction on 1 Februrary by increasing prices by up to 40%, the state-run Chronicle newspaper reported this morning.
Critics – including farmers, millers and civil society groups – warned that the tax would trigger inflation, encourage smuggling of cheaper imports and worsen the economic crisis in a country which has issued bond notes as a substitute for cash because of a shortage of US dollars, the main currency in Zimbabwe.
But the suspension is likely to increase the government’s own financial problems, as it has struggled to pay civil servants and even soldiers.
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