Retailers Urge Government to Scrap Punitive Capital Goods Duties

The Confederation of Zimbabwe Retailers (CZR) has made a bold pitch to Parliament to remove crippling duties on retail and wholesale capital equipment, warning that the current tax regime is strangling investment and delaying the sector’s expansion.

Presenting submissions to the Portfolio Committee on Industry and Commerce during the 2027 National Budget pre-budget consultations, CZR President Denford Mutashu revealed that businesses are being forced to pay duties of up to 85 percent on essential infrastructure such as cold-room panels, shelving and self-contained fridges.

“Such levels of duty significantly increase the initial cost of investment and make it more difficult for businesses to establish new branches, expand warehouse capacity and modernise existing operations.

“These goods should not be treated in the same manner as ordinary consumer imports. They constitute the infrastructure through which businesses create productive capacity,” said Mr Mutashu.

The CZR is proposing a duty-free capital expenditure allowance of up to USD 4 million for qualifying registered businesses undertaking new investment, expansion and modernisation.

Mr Mutashu also took aim at delays at Bureau Veritas, revealing that businesses are servicing bank loans for equipment that remains stuck outside the country awaiting inspection.

“A business can secure financing, place an order and begin servicing its loan, yet the equipment may remain outside the country or may not be commissioned because of inspection and clearance delays.

“The business therefore continues to incur financing and interest costs without receiving the productive benefit of the investment.”

On the cost of doing business, CZR renewed its call for the Intermediated Money Transfer Tax (IMTT) to be reduced to 1 percent, arguing that high transaction costs ultimately hurt consumers.

“The retail and wholesale sector processes a high volume of transactions, and transaction-related costs ultimately affect business operating costs and can have implications for consumer prices,” Mr Mutashu warned.

The submissions also highlighted concerns over textile duties, which were increased from 10 percent to 40 percent plus USD 2.50 per kilogram in the 2026 Budget.

He argued that local industry simply cannot meet national demand.

“This demonstrates that local industry currently does not have sufficient capacity to meet national requirements,” he said, proposing a reversion to 10 percent on fabrics not manufactured locally.

On energy, CZR called for a cap of USD 100 per generator per year on EMA emission fees, down from the current USD 500 to USD 1 000, and proposed a 150 percent tax deduction for qualifying solar investments above USD 200 000.

Mr Mutashu remained optimistic, citing Edgars Stores Limited’s FY2025 performance, revenue growth of 12 percent to USD 41.3 million and profit after tax up 139 percent, as proof that investment responds to improved conditions.

“The private sector is prepared to do more. What is required now is to remove the remaining barriers that prevent businesses from investing at the scale required to transform the economy,” he said.