It was expected that businesses that had increased prices of goods and services will also reduce prices.
But toll gate fees, electricity tariffs and local authority charges have since increased.
Businesses are passing on the costs to end users.
Consumers are bearing the burden as disposable incomes have been further eroded.
TM: Which of the new taxes have had the biggest impact?
PC:Increases on toll gate fees on Zimbabwe’s prime routes and passport fees are, among others, impacting on livelihoods.
There has also been an increase in taxes for spectacle frames.
TM:Where does the total monthly food basket stand now?
PC:As measured by the Consumer Council of Zimbabwe’s Low-Income Urban Earner Monthly Basket for a family of six, the cost of living measured in the local currency increased by 72% from ZW$3, 628 994. 20 in December 2023 to ZW$ 6, 242 051. 65 for January 2024.
Most products in the basket went up by almost 80%.
The increase in the prices of most basic goods in the family fasket is mainly attributed to the significant weakening of the local currency whose value depreciated by approximately 62% during the period under review.
Among the top shakers and movers in the basket were cabbage, salt, tomatoes, onions, and cooking oil, which rose by 97,7%, 63,7%, 56,4%, 50,6% and 44,8%, respectively.
This is partly attributed to the high demand for these products during the festive season.
In contrast, water and rates, washing powder, transport, and education recorded the least movement.
Commodity prices increased sharply due to the steep depreciation of the local currency after the relaxation of the managed exchange rate by the central bank last month.
Most supermarkets now display United States dollar (USD) prices as they are more stable compared to the local currency.
They are strictly insisting on payments in the greenback for selected commodities.
TM:What were the trends in US dollar prices?
PC:In USD terms, the basket decreased by 10,96% from US495,04 to US$440,79 during the same period.
This is attributed to the dual pricing system, which the CCZ noted in the market.
Most products, which are paid for in US dollars attract discounts.
This is why prices dropped in United States dollars.
But the prices of cabbage, salt, tomatoes, onions, cooking oil, and laundry bar did not drop.
TM:Tell us about trends in the price of services?
PC:As indicated above power tariffs, toll gate fees and local authority charges are among those that have increased.
Some local authorities are actually demanding their payments in USD as a hedge against inflation, despite the fact that the majority of our consumers have no access to the USD.
TM: Have you discussed with Treasury how the new taxes have affected consumers?
What has been the feedback?
PC: As CCZ, part of our mandate is lobbying and advocacy on behalf of consumers.
We have represented consumers at various policymaking interfaces with business associations and regulators.
We have raised many concerns that consumers have.
We have been attending dialogues organised by our parent ministry, the Ministry of Industry and Commerce, seeking views from business, producers among other stakeholders to find solutions bedevilling market transgressions.
Before the announcement of the 2024 National Budget, CCZ presented a paper to the Parliamentary Portfolio Committee on Budget.
TM:Are there any ways, in your opinion, that government can use to raise revenue without affecting consumers?
PC:Consumers will be affected by widening the tax base, which involves targeting certain sectors of the economy that were previously untaxed.
These include the informal sector, which was previously excluded.
Take note of the new Zimra tax dispensation. 🔗 Read Full Article
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