The government has reversed the implementation of a 10 percent withholding tax for tobacco growers without valid tax clearance certificates.

It has also emerged that farmers had threatened to withdraw their crop from sales at the auction floors if the 10 percent withholding tax was implemented.

The Minister of Finance, Cde Patrick Chinamasa told the ZBC News on Wednesday that tobacco production is rendered critical to the growth of the economy to such an extent that there is need to formulate incentives that encourage production apart from eroding earnings for producers of the golden leaf commodity.

“What can you expect from producers who are highly taxed?  It really does not make sense,” he said.

Cde Chinamasa who also presented a paper on the effects of economic challenges on development and security of the country at the Zimbabwe Defence College, said the anticipated bumper harvest is likely to result in Zimbabwe registering positive real economic growth rates by end of the year.

“The anticipated good harvest is a sign of good times ahead,” he said.

Agriculture is considered as a key element to Zimbabwe’s economic growth with tobacco being the leading commodity in terms of contributions to the national export earnings on a yearly basis.