tendai biti finance 29-08-10.jpgFinance Minister, Mr Tendai Biti is now under pressure from consumers and employers to remove the import duty on selected basic commodities amid revelations that industry is failing to sustain local market requirements.

Following a continuous spate of price increases after the restoration of import duty on selected basic commodities by the Minister of Finance in his 2011 Mid Term Fiscal Policy Review, pressure is mounting on Mr Biti to reverse the plan amid revelations that the initiative is eroding disposable incomes and likely to hinder macro- economic gains achieved so far.

A cross section of Zimbabweans have called on the fiscal authorities to ensure that they remove import duty in order to boost competition,  facilitate price stability, increase availability of goods and create a platform for industry to recapitalise operations.

“Prices are increasing on a daily basis and I believe this is due to the reintroduction of duty on basic commodities. The local market does not have the capacity to meet the demand of the commodities so fiscal authorities need to scrap duty on selected goods to enable them to be imported at reasonable costs,” said one Harare resident.

The Executive Director for the Employers Confederation of Zimbabwe, Mr John Mufukure says the restoration of duty has reduced the purchasing power parity for local consumers in a move likely to fuel wage and price spiral hikes in short to long term.

“We told the Minister on the impact of such a move, so they should reverse it,” said Mr Mafukure.

While Minister Biti last week warned the business community on speculative behaviour and profiteering, stakeholders are questioning the credibility of the latest import duty policy in addressing the needs of consumers at a time when local industry does not have the capacity to increase productivity due to inadequate funding.