By Chantelle Muzanenhamo
Zimbabwe’s Finance Minister, Mthuli Ncube, has publicly criticized Liquefied Petroleum Gas (LPG) retailers for not lowering prices despite the government’s recent scrapping of Value Added Tax (VAT) on the product.
Ncube accused the operators of “profiteering,” asserting they have disregarded government directives aimed at easing the financial burden on consumers.
“Government has noted with concern that some of the LPG operators have not reduced their prices, thus profiteering from the VAT relief which was aimed at citizens. This is unethical,” read part of the statement.
The decision to remove VAT on LPG was unveiled in the 2025 Budget and took effect on January 1, 2025, under Statutory Instrument 195 of 2024.
The initiative was introduced to make LPG, a vital energy source for many Zimbabweans, more affordable.
On January 7, 2025, the Zimbabwe Energy Regulatory Authority (ZERA) issued a directive specifying the maximum prices that LPG retailers should charge which is US$1.61 per kilogramme. However, many retailers have reportedly disregarded these guidelines, continuing to charge pre-VAT removal prices which were north of US$1.80.
Ncube emphasized the government’s intention behind the VAT exemption, stating, “The intention was to lower the prices of LPG gas by the extent of the VAT that was being charged previously.”
He urged retailers to comply with the guidelines and reduce prices accordingly.
Expressing his frustration, Ncube called on businesses to be responsible and transfer the tax relief benefits to consumers.
He highlighted that lowering prices aligns with the government’s broader objectives to promote a greener economy.
“I therefore urge LPG operators to reduce their prices by the extent of the VAT relief as intended. This will go a long way in giving relief to our consumers and citizens and is also consistent with Government efforts towards greening the economy,” Ncube stated.
Despite the government’s intervention, there are growing concerns that the removal of VAT has primarily benefited businesses rather than the ordinary citizens it was meant to assist.