Tongaat Hullets slams Zimbabwe’s tough fiscal measures – says the cost of doing business increased 

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 By Alois Vinga

LISTED agriculture and agri-processing firm, Tongaat Hullets has slammed Zimbabwe’s tough fiscal measures for choking the smooth flow of business on the back of plans to take advantage of internal efficiencies to circumvent the challenges.

Presenting the group’s performance for the period ended March 31 2024, the company slammed a series of fiscal measures implemented in the just-ended financial year.

“Statutory Instrument 80 of 2023 introduced at the onset of the financial year saw the suspension of import duty on basic commodities including sugar, affecting the industry significantly. The Company was not spared from the effects of the above, which contributed to the decline in financial performance.

“The Statutory Instrument was subsequently repealed in the last quarter. Amongst other fiscal policy measures was the introduction of more aggressive corporate taxes, effective 1 January 2024, thus increasing the cost of doing business for the whole economy,” the company said.

During the period, an inflation-adjusted operating loss of ZWL1,3 trillion was recorded for the year. Currency and inflationary dynamics continued to cause distortions in financial reporting.

The company recorded a net monetary gain of ZWL2,6 trillion (2023: monetary loss of ZWL0.1 trillion). This was influenced by the indexing of the actuarial loss on the post-retirement medical aid obligation (PRMA) and Retirement Gratuity (RG), which accounted for ZWL1,3 trillion, while the remaining balance was mainly due to the net indexing effect on other income statement-related items.

The net monetary gain was significant enough to turn the operating loss for the year into an overall inflation-adjusted profit of ZWL0,5 trillion. Without the indexing effect on the actuarial loss on PRMA and RG, the profit before tax would have been a loss of ZWL0,2 trillion.

“The Company continues to pursue strategies that minimize risk to the business, create value and exploit opportunities that arise. A new year awaits with more opportunities to seize and complexities to navigate while ensuring the core business operates sustainability,” the company added.