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CZI welcomes fuel rebate system

18 Jan, 2019 - 00:01 0 Views
CZI welcomes fuel rebate system Sifelani Jabangwe

eBusiness Weekly

Michael Tome
The rebate system that was introduced by Government to cushion businesses from the latest fuel price increases will work depending on how it is going to be structured, an industry lobby group has said.

Following the 150 percent fuel price increase that was announced by President Mnangagwa last week, Government has since come up with a rebate system meant to cushion the industry from the recent price adjustment.

“Cognisant of the need to prevent generalised price increases for goods and services following the fuel price adjustments, Government has decided to provide relief through refund of excise duty on fuel consumed by registered businesses in the following sectors, manufacturing, mining, agriculture and transport.

“The relief to be provided will be equivalent to the difference between the prevailing rates of excise duty and the rates that were applicable prior to this change,” reads a statement from the Ministry of Finance and Economic Development.

A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed. It is a type of promotion that marketers use primarily as incentives or supplements to product sales.

CZI president Sifelani Jabangwe, says the fuel price increase was necessary and the rebate proposal would work if it is properly structured.

“It’s (the rebate) something that we have to work with because the fuel price increase was necessary.

“It’s possible to make it work depending on how it is structured because if you buy fuel you will get receipts and those receipts are what you will present to zimra for claim.

“The new prices should, however, not result in wanton price increases as fuel constitutes only 10 to 15 percent of total costs of doing business. So prices should not go up by more than 10 percent,” said Jabangwe.

He, however, acknowledged that the cost base has changed and labour has to be compensated to cushion the workforce from prevailing economic hitches and he, on the same note, called for a Tripartite Negotiating Forum (TNF) to establish a way forward on the current impasse.

“One thing to acknowledge is that the cost base has changed, people with wages and salaries will have to be compensated for the costs which have gone up over the period, (this is the) reason why we are suggesting that there must a TNF session for us to determine the level of compensation,” said Jabangwe.

Economist John Robertson said the proposed rebate refund is such a badly thought-out idea.

“Having to hold prices down and applying for relief after incurring the higher costs of fuel seems a recipe for business failures.

Robertson also believes the rebate system would breed corruption.

“Very soon, the fuel price rebate will start to work extremely well for anyone who is well connected, corruption will win again,” he said.

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