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*Mahere Says 2024 National Budget To Harm Small Businesses* *Follow Pindula on WhatsApp for daily new updates* https://whatsapp.com/channel/0029Va84dngJP21B2nWeyM3v?rk Opposition legislator Fadzayi Mahere says the 2024 National Budget will harm small businesses after the Finance Minister proposed to reduce the Value Added Tax threshold to US$25 000 from US$40 000. In his budget presentation on Thursday, 30 November, Ncube said only traders registered for VAT and with valid Tax Clearance Certificates can buy goods from manufacturers. ---------- Latest itel S24 available on Pindula: 128GB storage, 4GB RAM $119 USD WhatsApp: +263715068543 Calls: 0772464000 Buy Online: https://www.pindula.co.zw/market/itel-s24-128gb-22-20240426142756795795/?s=wanews ---------- The VAT registration threshold will be cut from US$40 000 to US$25 000, or the local currency equivalent, starting in January 2024. Posting on X, Mahere said this will result in a hike in the prices of goods and negatively affect overall demand. She said: > The attack on small businesses in the new Budget is staggering. > The Value Added Tax threshold has now been reduced to US$25 000 from US$40 000. > In simple terms, this means that any small business that makes an average of $2100 per month or more will now have to register for VAT. > The impact on small businesses is that they will now have to increase the cost of their goods by 15% to enable them to collect the VAT. > The impact on a consumer is that the cost of goods will go up by at least 15% to accommodate this tax. > The impact overall is that demand will go down because the prices are too high. > Spending will go down and the economy will become even more comatose than it is now. > The VAT tax rate is at 15% despite calls from businesses for it to come down to 14.5%. > In a country where unemployment exceeds 85%, it is grossly irrational to propose a budget that taxes those trying to run a small business for survival. > The entire budget is anti-people. It’s a mess. However, responding to Mahere, one Mbonisi Siziba said nothing will change as producers already sell their goods with 15% VAT. He said: > Manufacturers already sell their goods with 15% VAT, therefore tax is trickled down to the final consumer, nothing changes except that tuckshops will be charging the same prices as supermarkets. > VAT registration will also enable the SME to purchase directly from the manufacturer legally. Tafadzwa Marere concurred, saying small businesses don’t have to increase prices by 15%. He said: > Not quite. They deduct the input tax on VAT on goods they buy so they don’t have to increase by 15%. If they use the same markup they should be fine. > What happens is that they start to have to remit that value added to Zimra. It’s only fair, isn’t it? Maybe the cost of compliance. Economa added: > It doesn’t work like that Fadzi, the small businesses will be able 2 claim input tax on the purchases. If goods cost $10, the input tax is 1.30 which they claim from ZIMRA hence no need to increase by 15% coz the net cost is now $8.70. When they sell for $12 the tax is $1.57, therefore 0.27c tax. More: Pindula News _If you found this article useful_ *Please support Pindula by forwarding to friends and groups*
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