The Zimbabwe National Chamber of Commerce (ZNCC) has called on the Government to address the high fuel import taxes as they have the potential to hold back industries’ efforts to compete in the African market.
In its submissions to the Ministry of Finance and Economic Development outlining business’s expectations for the 2022 national budget, ZNCC said tax cuts will make local businesses compete in the African Continental Free Trade Area (AfCFTA).
The ZNCC said the biggest factor driving high production costs was the fuel tax regime. It said:
There is a need to scrap the road haulage fuel import duty of US$0,05 per litre so as to reduce the cost of fuel in the economy, while also reducing fuel import duty.
Zimbabwe has the most expensive fuel in SADC (Southern African Development Community) and it does not do the country any favour in AfCFTA as well as in competitiveness.
Taxes and duties on fuel constitute about US$0,50 on every litre sold, which is too high.
With erratic power supplies, businesses are resorting to the use of generators, which is more expensive given the cost of fuel.
AfCFTA is a US$3.2 trillion bloc that has lined up a string of measures, including eliminating tariffs on 90% of goods originating from the continent of 1.3 billion people.
Last month, the CEO Africa Roundtable said AfCFTA had the potential to propel re-industrialisation in Africa through its tariff and non-tariff barrier reductions that are expected to increase intra-continental trade.
The United Nations Economic Commission for Africa has predicted that AfCFTA will raise intra-African trade by 15-25%, or US$50 billion to US$70 billion by 2040 compared to an Africa without the bloc.