Government scraps VAT on LP gas

Zimbabwe’s Sustainable Energy Plan has received a boost after the government scrapped Value Added Tax (VAT) on Liquefied Petroleum Gas (LPG), translating to a 10 percent reduction in the price of the commodity.

The removal of VAT for gas that was effected on the 1st of January this year has resulted in the Zimbabwe Energy Regulatory Authority (ZERA) slashing prices of the commodity by about 10 percent.

ZERA’s Chief Executive Officer, Eddington Mazambani revealed that the move will reduce energy costs for Industry and Commerce.

He said, “It is true that the gas prices have been slashed, this is in response to the removal of the Value Added Tax, so we have gazetted the relevant prices and we anticipate the trend to continue subject to market conditions.

“While this is for January, we anticipate the trend to continue intact all the value chains have been informed or notified of the developments and we expect them to comply.”

With statistics showing an ever-increasing consumption of gas by households, Chartered Governance and Accountancy Institute of Zimbabwe’s Chief Executive Officer, Dr Lovemore Gomera said affordable costs are important in ensuring that Zimbabwe diversifies energy sources.

“Businesses and households are increasingly using gas as an alternative and reliable form of energy so the removal of Value Added Tax is of greater importance in light of what is obtaining within the economy and the need to boost production further and facilitate sustainable ways of using energy in Zimbabwe.

“What is needed is leeway towards increased production in the economy, considering the gains likely to be derived from increased use of these cleaner and more efficient energy sources.

“This is coming when the economy or nation is focusing on sustainability and this augurs well in the long term,” he said.

Treasury revealed in the 2025 national budget the importance of LPG as a sustainable energy source in light of the economy’s power challenges.

ZBC