THE Confederation of Zimbabwe Industries (CZI) last week engaged the government to discuss the increase in direct and indirect taxes that are affecting the manufacturing sector, in a bid to address the challenge.
The emergency meeting was necessitated by the need for the government to address issues of taxes that companies were required to pay by various bodies that include Environmental Management Agency, Zimbabwe Revenue Authority and others.
CZI president Charles Msipa said: “Some of the challenges are exacerbated by the increase on direct and indirect taxes, influx of imports, especially on finished goods and labour costs that are not commensurate with productivity.”
Msipa said the national council of the CZI met on Tuesday last week to review the business operating environment and it was noted that the sector was in dire state.
“Companies continue to close down; and those that are still operating find it difficult to pay creditors.
“The national council deliberated on the matter and identified some key short-term issues that could provide relief to bring about industry viability.”
Msipa said the manufacturing sector lobby group wants a moratorium on the increase of direct and indirect taxes, proposals on duties of imports and finished goods on raw materials.
Industrial capacity utilisation grew from 10% in 2009 to 57,2% in 2011, but slumped to 44,2% in 2012.
CZI expects capacity utilisation levels to decline this year due to company closures since last year.