News / National
Imported used cars decline at Beitbridge Border Post
30 Oct 2011 at 22:13hrs | Views
Volumes of imported used cars arriving at Beitbridge Border Post has declined as large stocks that dealers had ordered ahead of the October 31 deadline prohibiting the importation of vehicles over five years are already in the country.
Although the profit margin put on these vehicles is relatively small, players in the motor trade business predicted vehicle prices to come down soon.
Before the suspension, there was stampede at the border with dealers rushing to beat the deadline. Government had set October 31 as the deadline before it rescinded and lifted the ban.
Figures from Zimra indicate that 2 950 and 3 535 motor vehicles were cleared at Beitbridge Border Post between August and September this year.
The figures, however, took a nosedive this month as all stocks arrived in the country.
Investigations by The Herald indicate that on average 150 cars were cleared per day at both Nerry and Manica bonded warehouses.
The number has since dropped to around 100 after the ban was lifted.
Since the beginning of October, between 40 and 50 car carriers would be cleared per day and the figure has since dropped to between 16 and 20 per day.
Zimra's director of legal and corporate affairs, Ms Florence Jambwa, said about 40 500 cars have been cleared at Beitbridge border post from January to date after the Government in the last national budget revised customs duty for most cars to between 25 and 40 percent.
"A total of 2 950 and 3 535 motor vehicles were cleared at Beitbridge border post in August and September 2011 respectively. Furthermore excluding removals in transit and removals in bond, Zimra clears an average 150 motor vehicles per day at the two sheds at Beitbridge border post.
"So far between January 2011 to date, we have cleared around 40 500 vehicles through the same border," she said.
"We are yet to receive official communication through another statutory instrument to uplift the ban from the Ministry of Transport, Communications and Infrastructural Development," she said.
Ms Jambwa confirmed that there was an increase in the number of vehicles brought into the country during the past two months.
She said on average it should take under an hour for one to get his car completely cleared at the border post with all the necessary papers in place.
"From the time of submission of all the relevant and proper import documents, it takes at most 20 minutes per declaration for valuation to be completed. After valuation, the importer has to go to the border post to settle their duties where our cash office is situated. It, therefore, takes an average of one hour for an individual importer to clear a motor vehicle at Beitbridge Border Post.
"Please note that we currently do not have any back logs for Customs Clearance Certificates (CCC). We have consistently managed to capture and release all CCC applications that we receive on a daily basis.
"Our neighbours, South Africa, have changed their system in that their notification system for motor vehicle importation is now 24 hours. This, therefore, means that no vehicles bought on a particular day can be moved to Zimbabwe on the same day it was bought. Such a delay results in the purchaser of the vehicle having to spend an extra day waiting for the vehicle to be delivered," she added.
Ms Jambwa said the calculation of customs duty was based on cost, insurance and freight of the motor vehicle from the country of exportation.
"Thus, all import documents to establish CIF for the vehicle must be submitted and these include the following: purchase invoice, bill of landing, insurance statement, port charges (ie Durban, Walvis Bay, etc), storage charges, Customs clearance charges at the ports of entry and transport/freight statements to border post of clearance into Zimbabwe," she said.
The above charges, she added, were used in calculating the value for duty purposes.
The rate of Customs duty is then applied on the value for duty purposes.
Where the motor vehicle is more than five years old, Surtax is also charged on the same value at the applicable rate.
"VAT is, however, based on the total of the value for duty purposes and the Customs Duty (i.e. VDP plus Customs Duty).
"Therefore, a motor vehicle which is more than five years old will attract Customs Duty, Surtax and VAT, while a vehicle aged five years and below will be exempted from paying Surtax only.
"When valuing motor vehicles for duty purposes, Zimra looks at the transaction value (invoice value) first. However, when the transaction value is doubted for any reason(s), values of similar vehicles recently imported are used to calculate the value," said Ms Jambwa.
The managing director of Oneturn Holdings, Mr Chamu Chiwanza, said many speculators in the industry would soon be stuck with their cars and buyers would start determining prices.
"The prices of these cars will soon come down. If you have many cars and people are not buying them you soon run of cash. In the next two or three weeks you will tell me a new story. This will be good news for buyers. Buyers will soon be determining prices," he said.
Some car dealers in Harare told the Herald that they did not know how to deal with the cars they had.
"We are not sure what to do with these cars," said a dealer along Mutare Road in Harare. "Perhaps the best solution would be to reduce the prices for us to compete with the Japanese dealers. We have no choice, but to make our cars cheaper. But this will obviously affect our business."
The ban on importation of second hand motor vehicles was initially imposed by Statutory Instrument 154 of 2010 gazetted in December 2010 by the Ministry of Transport, Communications and Infrastructural Development in terms of Section 81 of the Road Traffic Act CAP 13:11.
Statutory instrument 154 was amended by statutory instrument 44 of 2011, which then extended the ban to October 31 2011.
Although the profit margin put on these vehicles is relatively small, players in the motor trade business predicted vehicle prices to come down soon.
Before the suspension, there was stampede at the border with dealers rushing to beat the deadline. Government had set October 31 as the deadline before it rescinded and lifted the ban.
Figures from Zimra indicate that 2 950 and 3 535 motor vehicles were cleared at Beitbridge Border Post between August and September this year.
The figures, however, took a nosedive this month as all stocks arrived in the country.
Investigations by The Herald indicate that on average 150 cars were cleared per day at both Nerry and Manica bonded warehouses.
The number has since dropped to around 100 after the ban was lifted.
Since the beginning of October, between 40 and 50 car carriers would be cleared per day and the figure has since dropped to between 16 and 20 per day.
Zimra's director of legal and corporate affairs, Ms Florence Jambwa, said about 40 500 cars have been cleared at Beitbridge border post from January to date after the Government in the last national budget revised customs duty for most cars to between 25 and 40 percent.
"A total of 2 950 and 3 535 motor vehicles were cleared at Beitbridge border post in August and September 2011 respectively. Furthermore excluding removals in transit and removals in bond, Zimra clears an average 150 motor vehicles per day at the two sheds at Beitbridge border post.
"So far between January 2011 to date, we have cleared around 40 500 vehicles through the same border," she said.
"We are yet to receive official communication through another statutory instrument to uplift the ban from the Ministry of Transport, Communications and Infrastructural Development," she said.
Ms Jambwa confirmed that there was an increase in the number of vehicles brought into the country during the past two months.
She said on average it should take under an hour for one to get his car completely cleared at the border post with all the necessary papers in place.
"From the time of submission of all the relevant and proper import documents, it takes at most 20 minutes per declaration for valuation to be completed. After valuation, the importer has to go to the border post to settle their duties where our cash office is situated. It, therefore, takes an average of one hour for an individual importer to clear a motor vehicle at Beitbridge Border Post.
"Please note that we currently do not have any back logs for Customs Clearance Certificates (CCC). We have consistently managed to capture and release all CCC applications that we receive on a daily basis.
"Our neighbours, South Africa, have changed their system in that their notification system for motor vehicle importation is now 24 hours. This, therefore, means that no vehicles bought on a particular day can be moved to Zimbabwe on the same day it was bought. Such a delay results in the purchaser of the vehicle having to spend an extra day waiting for the vehicle to be delivered," she added.
Ms Jambwa said the calculation of customs duty was based on cost, insurance and freight of the motor vehicle from the country of exportation.
"Thus, all import documents to establish CIF for the vehicle must be submitted and these include the following: purchase invoice, bill of landing, insurance statement, port charges (ie Durban, Walvis Bay, etc), storage charges, Customs clearance charges at the ports of entry and transport/freight statements to border post of clearance into Zimbabwe," she said.
The above charges, she added, were used in calculating the value for duty purposes.
The rate of Customs duty is then applied on the value for duty purposes.
Where the motor vehicle is more than five years old, Surtax is also charged on the same value at the applicable rate.
"VAT is, however, based on the total of the value for duty purposes and the Customs Duty (i.e. VDP plus Customs Duty).
"Therefore, a motor vehicle which is more than five years old will attract Customs Duty, Surtax and VAT, while a vehicle aged five years and below will be exempted from paying Surtax only.
"When valuing motor vehicles for duty purposes, Zimra looks at the transaction value (invoice value) first. However, when the transaction value is doubted for any reason(s), values of similar vehicles recently imported are used to calculate the value," said Ms Jambwa.
The managing director of Oneturn Holdings, Mr Chamu Chiwanza, said many speculators in the industry would soon be stuck with their cars and buyers would start determining prices.
"The prices of these cars will soon come down. If you have many cars and people are not buying them you soon run of cash. In the next two or three weeks you will tell me a new story. This will be good news for buyers. Buyers will soon be determining prices," he said.
Some car dealers in Harare told the Herald that they did not know how to deal with the cars they had.
"We are not sure what to do with these cars," said a dealer along Mutare Road in Harare. "Perhaps the best solution would be to reduce the prices for us to compete with the Japanese dealers. We have no choice, but to make our cars cheaper. But this will obviously affect our business."
The ban on importation of second hand motor vehicles was initially imposed by Statutory Instrument 154 of 2010 gazetted in December 2010 by the Ministry of Transport, Communications and Infrastructural Development in terms of Section 81 of the Road Traffic Act CAP 13:11.
Statutory instrument 154 was amended by statutory instrument 44 of 2011, which then extended the ban to October 31 2011.
Source - TH
