Beer, cigarette prices to shoot up
HARARE – Tobacco and alcohol consumers must brace for a price hike as government moves to fund student grants through taxes on beer and cigarettes, the Finance minister said yesterday.
Tendai Biti said a new pricing policy is going to be used to reduce the damage caused by tobacco and alcohol.
He then hiked excise duty on alcohol and cigarettes in the 2013 National Budget presented to Parliament yesterday.
Proceeds from the taxes will bankroll university student grants, an announcement that provoked inaudible interjections from legislators.
“We project that by the end of the year taxes from alcohol and tobacco will net about $11 million,” Biti said.
“This is a welcome development as government has in the recent past been neglecting student grants.”
A former union leader at the University of Zimbabwe, Biti had come under fire from angry student leaders for failing to bankroll university grants, a move that had seen students from poor backgrounds chucked out of class.
Biti’s move will likely mend relations with learners in tertiary institutions.
“This increase is also in line with our 15-point development strategy, in the rationalisation of taxes in the budget,” the minister said.
The proposal comes after Labour minister Paurina Mpariwa appealed to the Finance ministry to hike beer and cigarette prices to establish a disability fund.
Mpariwa suggested at the 22nd Session of the Ministerial Governing Board (GB) of the African Rehabilitation Institute (Ari), the sin tax proposal.
Sin taxes are taxes imposed on activities harmful to society.
“Alcohol and tobacco are vices thus prime targets of heavy taxation,” Mpariwa said.
“We are going to adopt a levy system on tobacco and alcohol that will be aimed at controlling the intake of these products, and at the same time contributing towards the welfare of the society,” said Mpariwa.