High Taxes Curtail Zim Competitiveness
Zimbabwe’s manufacturing sector is currently choked in countless challenges that are curtailing competitiveness and has appealed to the central bank to assist with recapitalization of local industries to enhance productivity, a local economist has said.
Speaking at the National Economic Consultative Forum dialogue on pricing on Tuesday in Bulawayo, Dr Nyasha Kaseke said liquidity crisis, competition from cheap imports as well as low demand for domestic products were some of the factors affecting capacity utilization.
“Major factors affecting capacity utilization in Zimbabwe are liquidity crisis, low demand for domestic products, power and water shortages, competition from imports and local producers,” said Kaseke.
“Poor road infrastructure is 15%, poor road infrastructure which makes access to ports difficult and expensive 11%, inefficient railway network 6%, telecommunication 13%, power cuts and shortages 23%, this is all impacting business in Zimbabwe,” he added.
Kaseke said the manufacturing sector is having to content with high cost of raw materials worsened by the unavailability of cash in the country.
“Raw materials costs, foreign currency challenges, delays in paying raw materials, demand in cash for paying raw materials is scarce and not available.
“Electricity tariffs are very high and unavailable; companies are now resorting to private generators,” said Kaseke adding that interest rates and taxes were high in comparison to other countries in the region.
He attributed companies’ reluctance to pay taxes to corruption and abuse of funds by the government saying corporates finds no benefit in compliance.
“Companies don’t comply to taxes because government abuses funds, corruption from tax officials and also say there is no benefit of paying taxes,” said Kaseke.