Forex duty: Car importers stuck at Beitbridge

There was confusion at Beitbridge Border Post yesterday, with luxury vehicle importers refusing to pay excise duty in foreign currency in line with the new regulations announced by Finance and Economic Development Minister Professor Mthuli Ncube in his 2019 National Budget Statement on Thursday.

"In order to redirect scarce foreign currency to the productive sectors of the economy, the budget proposes that customs duty and all other taxes on imported motor vehicles be levied in foreign currency acceptable as legal tender, with effect from 23 November 2018," said Prof Ncube.

The measure will however, not apply to commercial motor vehicles and those for use by the physically challenged.

"However, on compassionate grounds, a transitional mechanism will be put in place to cater for motor vehicles and designated goods that were purchased on or before 22 November 2018 and consigned within a maximum period of six weeks. The exemption will be granted on the basis of recommendation by the Zimbabwe Revenue Authority (Zimra) and approved by Treasury", said Prof Ncube.

When The Herald news crew visited Manica Transit Shed yesterday, car importers, especially those who had their vehicles delivered and bought before the announcement of the 2019 National Budget Statement, said they were waiting on Zimra to clarify their case.

They said although Value for Duty Purposes (VDP) and duty percentages of 96 percent had not changed, it was unfair for the Government to charge duty in foreign currency considering that the late duty calculations at the transit shed were not of their making. "Government must reconsider its position. The delay in duty calculations is not of our own making and we cannot be punished for that.

"The vehicles were delivered early and Zimra is overwhelmed with processing the entries. This should not burden importers," said a car dealer who was only identified as Mike.

He said it was absurd that the Ministry of Finance was requesting that they make written submissions to seek authority to pay duty for their vehicles using the Real Time Gross Settlement (RTGS) system.

Zimra officials were not accepting payments of duty on imported vehicles pending further clarification from their Commissioner-General Ms Faith Mazani. The revenue authority's spokesperson Mr Francis Chimanda could not respond to enquiries by end of day yesterday.

A border authority said, "Zimra is still consulting their head office on the way forward on the grace period to pay duty through the usual RTGS method, with respect to those who had already shipped the vehicles to the two transit sheds - Manica and Malindi — before the new regulations."

There is a general feeling among importers that the minister's policy was rushed. In separate interviews, Zimra officials said the new regulations had a lot of technical challenges affecting its implementation.

"Technically, all vehicles whose duty had not been calculated by midnight on 22 November are liable to pay duty in foreign currency under the new regulations.

"However, we have a challenge with people arguing that most of their vehicles had been shipped prior to the new regulations. We have to consult further", said one Zimra official.

Secretary for Finance and Economic Development Mr George Guvamatanga did not respond to calls and text messages sent to his mobile phone.

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.

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