gtag('config', 'UA-12595121-1'); Government Extends VAT Relief for Agriculture, Pours Millions into Irrigation Projects – The Zimbabwe Mail

Government Extends VAT Relief for Agriculture, Pours Millions into Irrigation Projects

Prof. Mthuli Ncube
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HARARE – The Zimbabwean government has reaffirmed its commitment to boosting agriculture by maintaining the suspension of a 15% Value Added Tax (VAT) on agricultural inputs, implements, and produce.

This policy, announced at the Zimbabwe Irrigation Investment Conference, is part of a broader strategy to attract investment in vital irrigation infrastructure across the country.

Finance Minister Professor Mthuli Ncube emphasized the government’s focus on agricultural growth, particularly in the face of climate change. He highlighted the importance of these tax breaks in helping farmers weather climate challenges and expand their irrigation capabilities.

The VAT suspension applies to a wide range of agricultural equipment, including tractors, tillage machinery, combine harvesters, and irrigation systems like center pivots, sprinklers, and pumps. This move aims to stimulate investment in irrigation infrastructure, a crucial factor in boosting productivity and resilience against Zimbabwe’s ever-changing climate.

Stakeholders in the farming sector have applauded the government’s decision. Industry leaders like Gary Grubb of Western Pivots Zimbabwe and representatives from farming unions expressed optimism about the potential impact of these incentives. They believe the VAT removal will not only attract new irrigation projects but also contribute to the long-term viability and growth of Zimbabwe’s agricultural sector.

Further demonstrating its commitment, the Treasury has allocated over ZWG$88 million this year to support irrigation initiatives. These funds will be directed towards projects like irrigation system rehabilitation, dam construction, farm mechanization, and technological advancements. This financial commitment underscores the government’s proactive approach towards promoting sustainable agricultural development and ensuring food security for Zimbabwe.

The suspension of VAT on agricultural equipment and inputs marks a significant policy shift aimed at fostering agricultural expansion and resilience. By incentivizing investment in irrigation and supporting farm mechanization, the government seeks to enhance agricultural productivity, mitigate climate risks, and ensure the long-term sustainability of this vital sector.

Source: ZBC