Duty on vehicle imports gazetted

Finance and Economic Development Minister Professor Mthuli Ncube has invoked the Customs and Excise Act and imposed duty in foreign currency on an array of goods that include vehicles and meat, in line with the 2019 National Budget Statement he presented last week.

The other affected imports include horticultural products, cosmetics and selected fruits. The announcement was made in a Government Gazette published last Friday in terms of Section 115 (3) of the Customs and Excise Act (Chapter23:02) and would be known as (Designation of Foreign Currency Dutiable Goods) Notice 2018. The regulations came into effect on November 23.

Clause 3 (1) of the regulations reads as follows: "Subject to Section 3, the Minister of Finance and Economic Development hereby designates goods whose tariff codes and description are listed in the Schedule below for the purpose of Section 115 (3) of the Act.

"(2) Every person who imports any goods designated in terms of this notice shall pay duty in foreign currency. (3) Goods purchased on or before 22 November 2018 and consigned on or before 3rd January 2019, shall be exempted from the operation of this notice provided an approval for the exemption is obtained from the Ministry of Finance and Economic Development within 40 days of date of importation of the goods."

The list of vehicles to be charged duty in forex include motor vehicles with racing driver only and double cab both petrol and diesel engine.

Other goods listed for duty in forex include fresh cheese, grated or powdered cheese of all kinds, fresh grapes, groundnuts, margarine, selected meat products, poultry products, swine meat, preserved fish and salt water. The other products on the list include eggs, sugar confectionery, chocolates, cereals, sweet biscuits, bread, tomatoes, potatoes, mushrooms, beans, grape juices, selected cigarettes, trunk suitcases, handbags and toilet linen. While Government has identified several goods on which duty would now be paid in foreign currency, it is vehicles that have been the major talking point.

When the policy statement was announced there was confusion on the effective date of the directive as those who had made payments for their vehicles before the announcement felt hard done by as they were still to take delivery of their vehicles. But the Zimbabwe Revenue Authority threw a lifeline to private motor vehicle buyers who paid for car imports on or before November 22, 2018, exempting them from mandatory duty in foreign currency.

The revenue collector said individuals who imported vehicles on or before November 22, and whose cars are scheduled to arrive in Zimbabwe on or before January 3, 2019 can pay their duty through RTGS, bond notes or foreign currency.

Zimbabweans spend roughly US$500 million on vehicle imports annually. A total of 300 second-hand vehicles are delivered at Beitbridge Border Post, and around 200 import entries are being processed per day. On average, a modest vehicle attracts import duty of between $2 500 and $5 000.

Zimra collects at least $8,5 million monthly from vehicle imports at Beitbridge. As a result of the panic a few weeks before the announcement of the National Budget Statement, daily imports from the neighbouring country had increased to between 500 and 700 cars.