Agri-business Business

Zero-rate maize products – MAZ

THE Millers Association of Zambia (MAZ) has proposed that Government considers zero-rating maize and its products, to make the production of the staple food competitive and affordable to consumers.
In its submission of proposals for the 2015 national budget to the Ministry of Finance, the association’s executive director Harrison Banda recommends  zero-rating of maize and its products, including mealie-meal and maize bran for value added tax (VAT) purposes.
Mr Banda notes that since the VAT status of maize changed from zero-rating to exemption, millers have suffered the input VAT paid in the production of mealie-meal, thereby making the products more expensive.
He says as a result, the additional costs have been passed on to consumers in form of increased mealie-meal prices.
“This does not reflect well as maize is the staple food of the majority of the Zambian population. Every effort should be made to make the cost of producing the staple food as low as possible to fight poverty. A healthy population would result in higher productivity,” the proposal reads.
With the recent removal of subsidy on maize, MAZ feels the effect of high mealie-meal prices was being felt more by majority of the consumers.
The association notes that if maize and its products were to be zero-rated for VAT purposes, the maize value chain players -  farmers, grain traders, millers and retailers – would be able to reclaim the VAT suffered on the production inputs which include packaging, machinery spares, and thereby lower the cost of production.
Such benefits would be passed on to the consumers and make the products more affordable, in view of the rising food prices.
MAZ also proposes zero-rating of stockfeed and soya beans.
MAZ feels that following the change in the VAT status from zero-rating to exemption in the 2004 budget, the stockfeed industry has suffered the input VAT paid in the production of stockfeed, making it more expensive for farmers engaged in livestock farming.


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