By Daniel Chigundu
The People’s Democratic Party (PDP) says the decision by government to introduce Statutory Instrument 20 of 2017 (SI20) is a clear revelation that the ruling party lacks understanding of basic economics.
SI20 which came into effect on February 1 2017, introduced a 15 percent Value Added Tax on such basic consumables as meats, rice and cereals which constitute the family food basket
The coming in of SI20 has resulted in prices of basic goods such as meat, rice and mealie-meal rising sharply in supermarkets to match the new tax requirement.
In a statement PDP national spokesperson Jacob Mafume said the introduction of SI20 will ensure that more people starve despite the good rains being experienced at the moment in the country.
“The recent surge in the cost of the consumer basket to US$590.52, at a time when 83 percent of the people live on less than US$1.35 per day, because of SI20 of 2017 and the fluctuating cost of fuels betray the heartless nature of the Zanu PF regime.
“SI 20 of 2017 introduced a 15 percent tax on meats, rice and cereals which constitute the critical consumables of the family food basket. This tax has no logic both as a mechanism for raising funds and for promoting business, is a shock and undisputed proof of Mugabe’s failure to manage basic economics.
“While the good rains, the country is receiving hold the promise of a bumper harvest that would save millions of Zimbabwe’s poor who are surviving from hand to mouth, the Mugabe regime is more than determined to ensure that the poor should continue to starve and lack basic nutritious food,” he said.
Mafume added that the net effect of this SI is that millions of families will once again face starvation amid plenty and malnutrition will thrive among the growing kids as meats and fish are the most popular and accessible sources of protein in the country.
He said the 15 percent increase in the price means that families, who are living below the poverty datum line, must find substitutes and these will be of low nutritional value, substandard and unhealthy.
The lawyer-cum politician said the Zanu PF government has effectively condemned over 90 percent of the population to an artificial food crisis in a year when they must be abundant food.
It was expected that with the current rains being experienced in the country and the preliminary crop assessment indicating a bumper harvest, prices of such grains as maize and rice will likely go down.
Mafume said by increasing prices at a time when they should be reducing them, shows that government is determined to milk the poor people dry.
“The action by the indifferent and clueless regime further betrays its lack of understanding basic economics. Instead of lowering taxes on basic consumables and thus push aggregate demand which would create fiscal space in the economy, they are determined to milk the poor dry with devastating consequences at personal and economic level. In the end the poor will be poorer and the economy will suffer more.
“From an economic view, it is hogwash, politically it is criminal and morally it is a disaster and is proof that Mugabe and Chinamasa are economic ignoramuses who have no place in the all-important task of managing the national economy,” he said.
Just last week Surrey Group managing director Simon Arnold told a Parliamentary Committee on Lands Agriculture and Mechanisation that the new SI will only make the cost of production high and might force companies to consider retrenching