Zim not budging on Customs law
This comes after bitter criticism of the new customs regulations by vehicle and electronics importers, who said charging duty in foreign currency would push the prices of cars, clothes and other commodities beyond the reach of many Zimbabweans struggling to cope with the country’s high levels of inflation.
The Zimbabwe Revenue Authority last week announced that it would start charging duty on all goods classified as luxuries in hard currency, citing huge losses of revenue due to the low official exchange rates, which had made the importation of cars from Singapore, Japan and the United States cheaper than buying from local dealers.
The US dollar is pegged at Z$250 on the official market, meaning that even if charged 100 per cent import duty, an importer of a vehicle worth US$10,000 would pay only Z$2,5 million for import duty, which is equivalent to slightly less than US$200 on the parallel market.
Customs duty for cars ranges between 60 and 80 percent depending on the type of vehicle, and a number of businesses involved in the importation of used cars were sprouting in all parts of Zimbabwe.
Vehicle importers last week decried the new regulation, saying the law was meant to prohibit the importation of luxury vehicles in the face of critical foreign currency shortages.
Zimbabweans are reported to have been spending an average US$400,000 a day on the importation of luxury vehicles, with most of the money suspected of having been sourced from the country’s parallel market.
The Zimbabwe Revenue Authority last week announced that all importers of goods classified as ‘luxury goods’ would have to pay their customs duty in U.S dollars and Rand, a move believed to be aimed at raising foreign currency and reducing the country’s expenditure on non-strategic imports.
Minister of Finance, Dr Samuel Mumbengegwi said the move was aimed at channeling free funds to the importation of goods and commodities that have a bearing on national development rather than just promote the importation of non-essentials.
“We are trying to influence investment patterns towards the more production oriented activities as part of strategies to turn around the economy,” he said.
A number of manfacturing companies in Zimbabwe, including textile manufacturers, vehicle assembly plants and shoe manufacturers have had to either scale down their operations or close down after the local market was flooded with cheaper imports.
The government is looking at ways of minimising the high expenditure of foreign currency on luxury goods and maximise on the importation of more strategic commodities like agricultural inputs and construction materials.