ZIMBABWE’S manufacturing sector is being crippled by a thriving “pavement economy,” where smugglers flood the market with essential commodities like soap, evading Value Added Tax (VAT) and leaving local producers at a 15 percent disadvantage.
Smugglers sell soap on the streets for as little as US$1, while local manufacturers, burdened by VAT, are forced to charge US$1,15, making it difficult for them to compete.
This issue extends beyond soap manufacturers, affecting the oil expressers who supply them.