LEADING retailer, OK Zimbabwe says the 2025 National Budget is set to increase business costs in the coming year worsening an already tough operating environment.
The National Budget blueprint delivered by Prof Mthuli Ncube last month introduced a cocktail of new taxation measures, triggering an outcry from industry which Parliament is already seized with.
Chief among the concerns is that the tax measures are repetitive and exerting more pressure on the highly taxed narrow formal sector while effectively leaving the informal sector.
Some have raised concerns that the new tax measures were imposed repetitively on the same value chain thereby pushing up the cost of production and depleting export competitiveness.
So tax thirsty is the National Budget blueprint to the extent that it has gone after betting game winners who are now forced to surrender a portion of their earnings to the taxman.
Adding a voice of concern, OK Zimbabwe chairman Herbert Nkala said the year ahead will increase the cost of doing business significantly.
"The tax proposals in the 2025 budget statement are likely to drive up costs and lower margins realized on affected product lines such as alcoholic and deli products. Going into the second half of the trading year, cost optimisation and product diversification will remain key priorities in sustaining and enhancing the growth achieved during the period under review," he said.
Despite the challenges in the trading environment during the half-year period, the Group realised growth in both sales volumes and revenues.
Sales volumes went up by 27.69% as compared to the prior period while the gross profit margin improved from 16.83% in the prior period to 19.64% in the current period.
The growth in volume was bolstered by a successful OK Grand Challenge promotion which included the OK Mart stores for the first time which resulted in growth in the contribution of bulk sales compared to the prior period.
Other expenses went up by 16,29% from US$17,3 million in the prior period to US$20,17 million in the current period largely due to the increased cost of energy supply which went up from USD5 million in the prior year to US$8,2 million.
