Published: 4 hours ago

Zimbabwe’s largest business lobby, the Confederation of Zimbabwe Industries (CZI), has raised concerns that the country’s sugar content surtax on beverages is crippling local manufacturers and undermining competitiveness, urging the government to align the levy with regional benchmarks.

The industry argues that the tax is driving up costs for compliant businesses, fueling a surge in cheaper imports, and putting local producers at a disadvantage compared to regional rivals benefiting from more favourable tax regimes.

Speaking during an engagement with the Ministry of Industry and Commerce, CZI CEO Sekai Kuvarika said the sugar tax collected roughly ZWG803.1 million (about US$30 million) in the first six months of 2025, a figure she described as unsustainable for compliant firms. The lobby recommended lowering the tax rate to US$0.0005 per gram and exempting the first four grammes per 100ml per beverage, a move aimed at protecting local producers while maintaining government revenue.

Delta Corporation, Zimbabwe’s largest beverage manufacturer, reportedly paid US$4.5 million in sugar taxes in the quarter ending June 30, 2025 alone—nearly half of what some regional competitors pay annually. Delta’s company secretary, Faith Musinga, highlighted that the combination of high sugar taxes and rising input costs is eroding price competitiveness and encouraging the inflow of cheaper, often unregulated imports.

Analysts warn that Zimbabwe’s sugar tax structure has made locally produced beverages more expensive than regional alternatives, opening the market to smuggling and artificially sweetened imports. Sparkling beverage sales at Delta grew by just 2% in the June quarter, largely due to price discounting to offset the surtax.

CZI stressed that it does not oppose sugar taxes in principle but called for a balanced approach that meets fiscal objectives while preserving industrial competitiveness, investment, and consumer access to affordable beverages.

Finance Minister Professor Mthuli Ncube acknowledged the concerns, noting that government is considering adjustments in the upcoming fiscal plan to ease pressure on manufacturers without compromising public health objectives.

Until reforms are implemented, Zimbabwe’s beverages subsector faces ongoing challenges, caught between a punitive tax regime, rising imports, and unregulated alternatives.
- Business Times

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