ZIMRA to deduct 30% from payments to farmers

Estimated read time 2 min read

As the festive season approaches, farmers in Zimbabwe are facing the harsh reality of celebrating Christmas without the much-needed funds, following a decision by grain millers to suspend payments. This drastic move is a direct response to a standing instruction from the Zimbabwe Revenue Authority (ZIMRA), compelling millers to withhold 30% of payments to farmers who lack tax returns.

The circular issued by the Grain Millers Association of Zimbabwe (GMAZ) on November 15, 2023, underscores the dire situation. The circular, addressed to all members and copied to various agricultural unions, emphasizes the ZIMRA directive to deduct a significant 30% withholding tax on wheat payments to farmers and contractors, citing Section 80 of the Income Tax Act.

“We find ourselves in a challenging position due to the standing ZIMRA instruction, which mandates the deduction of 30% withholding tax on wheat payments to farmers and contractors,” the circular states. However, it goes on to reveal that the GMAZ is actively engaging with tax authorities in an effort to secure a waiver, allowing farmers and contractors to receive their full payments.

In the interim, the circular recommends that millers take the drastic step of halting payments, creating a financial vacuum for the already struggling farmers. The association advises millers to await the 2024 National Budget Statement, holding out hope for possible relief for both millers and farmers alike.

J. Mupavira, the National Coordinator of GMAZ, expressed the association’s commitment to resolving the issue, stating, “GMAZ is currently engaging with tax authorities seeking a waiver so that farmers and contractors get their 100% payments.”

The repercussions of this financial setback are significant, as farmers prepare for the holiday season with limited resources. The uncertainty surrounding the outcome of the discussions between GMAZ and tax authorities further deepens the anxiety among farmers and contractors who are already grappling with the challenges of the agricultural sector.

As the nation eagerly awaits the 2024 National Budget Statement, the fate of Zimbabwean farmers hangs in the balance, highlighting the critical need for swift and effective resolution to alleviate the financial strain on those who play a vital role in the country’s food production.

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