'Motor vehicle duty must be reduced,' says Tariffs Commission

GOVERNMENT has been recommended to halt any further increase in tariffs on duties on imported vehicles as the current tariffs of between 40% and 60% give the local assembly more than adequate protection.

According to the Competition and Tariff Commission status report on the Motor Vehicle Assembly Industry in Zimbabwe which was presented this morning in Harare, locally assembled vehicles are currently very expensive due to the lack of economies of scale in the production of vehicles by manufacturers.

The Competition and Tariff Commission (CTC) chair Dumisani Sibanda said duty rates on vehicle types not currently assembled locally which are above 25% should be reduced so that there is a wide a variety of cars available for both corporates and individuals.

According to the Zimra tariff structure, passenger vehicles with a cylinder capacity not exceeding 1500cc attract a duty of 40% and those above 1500cc attract a duty of 60%. Commercial vehicles with a payload not exceeding 1400kg attract 40% duty and double cabs attract 60%.

The reports also revealed that the local motor vehicle manufacturers Willowvale Mazda Motor Industries (WMMI) and Quest Motors are on the verge of collapse due to competition from grey imports.

According to the report, the sector has been operating in a shrinking environment for the past 14 years. Employment in the new vehicle market has gone down from over 5 000 workers in 1997 to 95 currently.