ZIMRA warned against intensified anti-smuggling campaign

Experts in the retail sector have called for caution in the government's ongoing anti-smuggling campaign, warning that its current trajectory may lead to sharp increases in the prices of basic commodities. The Zimbabwe Revenue Authority (ZIMRA) intensified its efforts in December 2024, focusing on cracking down on smuggled goods at the country's borders, with some seizures running into millions of dollars.

This week, the government further escalated its campaign, issuing a notice listing 19 additional products deemed to be smuggled, including alcoholic beverages, cement, clothing, footwear, diapers, motor spares, washing powder, and detergents. The notice emphasized that businesses found in possession of these goods, without proof of duty payment to ZIMRA, would be considered to have smuggled the items and would face penalties.

"If your business is found in possession of these goods, and you cannot show ZIMRA proof that you paid duty for them, you will be deemed to have smuggled the goods and liable to payment of the duty thereof, including applicable penalties," the statement read in part.

While the campaign has been praised for addressing illegal trade practices, a local retailer who spoke to NewZimbabwe.com expressed concern over its long-term impact on the formal retail sector. The source warned that the initiative, although noble in its intentions, fails to consider the economic realities facing the country.

"Yes, duties must be paid by importers, but while the operation is highly noble, there is a need for authorities to be realistic about our country's productive status. These products listed as specified for smuggling have been found at a very cheaper price locally, enabling citizens to purchase them at a lower cost," the retailer said.

According to the source, the formal retail sector is already struggling, with empty shelves becoming increasingly common as businesses downsize or close shop altogether. Reports indicate that some supermarkets are now limiting their hours, operating three days a week to cope with reduced sales volumes.

"The formal retail sector is going down, with many businesses scaling back operations. Some supermarkets are resorting to a three-day work schedule due to dwindling business. This is an indication that many stores are on the brink of closure," the retailer explained.

The challenges facing the formal retail sector, the source added, are likely to push more consumers toward the informal market, which, under pressure, may have no choice but to raise prices. The result, they warned, could be a significant surge in the cost of living for the already struggling populace.

"There is a need for authorities to balance the interests, bearing in mind the possible risks of a surging cost of living for an already struggling populace," the retailer concluded.

As Zimbabwe continues to grapple with an economic crisis, balancing the fight against smuggling with the welfare of ordinary citizens will be crucial in determining the success of both the anti-smuggling campaign and the broader economic recovery efforts. Experts are calling for a more nuanced approach that considers the potential for rising prices and the challenges faced by the formal retail sector in a fragile economy.