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Biti raids drinkers, smokers to fund education
15/11/2012 00:00:00
by Staff Reporter
 
Alcohol prices ... Tendai Biti
 
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DRINKERS and smokers face Christmas pain after Tendai Biti on Thursday announced a duty rise on alcohol and cigarettes.

The Finance Minister told the House of Assembly that alcohol will be subject to a rise in duty of 5 percent, while the duty on cigarettes went up from US$10 per 1,000 sticks to US$15.

The changes come into effect from December 1.
 
Biti said he hoped to raise $11 million from the sin tax which would all go towards the education budget.

He told Parliament as he unveiled his 2013 budget: “We have increased excise duty on tobacco and alcohol and this extra increase will be ring-fenced towards the education sector in three areas, namely vocational training and to the two ministries of education both the lower and higher ministries.”

Speaking to New Zimbabwe.com after his budget statement, Biti said “the net effect (of the duty raise) is a US$0.01 increase on a pint of beer” as he sought to pre-empt a backlash from drinkers.

But the increase could be sharper on imported alcohol which was on average priced lower that local brews, Biti said.

“I, therefore, propose to levy a specific rate of excise duty of $0,45 per litre or 45 percent, whichever is higher, in order to level the playing field between imported and locally produced clear beer,” said Minister Biti.

Biti said cigarette levies were being introduced worldwide as governments sought to “mitigate the social costs arising from consumption of hazardous substances”.

Past Finance Ministers, notably Simba Makoni in 2001, were careful to keep drinkers on their side. Makoni’s ‘Drink and Cycle Home’ budget saw him slash excise duty on bicycles and beer.

Biti confirmed drinkers had been left alone since 2004, but now they have to pay a little more for the wise waters.

“The rate has not been reviewed since January 2004, in order to allow ample time for business to re-invest in new plant and equipment,” he said.

“As a result, significant investment in bottling and ancillary plants has been injected since the adoption of the multi-currency regime in February 2009. Volumes of beer sales have, thus, grown by about 270 percent from 2009 to 2012.”

Last week, Education Minister David Coltart accused parents of spending money on beer and mobile phones while neglecting to pay fees for their children.



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Biti will hope smokers and drinkers will take the new hit to their budgets in their strides as he stressed that the money raised would all go towards education.


 
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