Date Posted: Thursday 26-Apr-2007The Herald
April 24, 2007
Posted to the web April 24, 2007
Thupeyo Muleya and Alfred Chagonda
Harare
ABOUT 180 vehicles are stuck at a Beitbridge customs warehouse as their owners are unable to clear them following the introduction of new regulations that compel importers of cars and other luxury goods to pay duty in foreign currency.
Zimbabweans were spending an estimated US$400 000 importing an average of 80 used vehicles a day from Japan, Singapore, Dubai, the UK and the United States.
Under the new regulations, the State is expected to rake in an average of US$200 million a day in customs duty while vehicle assemblers are also expected to experience a boost in their businesses as buyers would have to switch to locally-assembled vehicles.
Before the new regulations, which came into effect on April 5, clearing cars took two days at most and between 1 200 and 1 500 imported used vehicles went through the border post every month.
Some of the cars were bought from Dubai, the United Kingdom, Japan, Singapore and the United States long before the implementation of the new regulations that require vehicle importers to pay duty ranging from 60 to 80 percent of the value of the vehicle.
The Zimbabwe Revenue Authority motor vehicle evaluation department, which used to handle an average of 80 cars destined for the Zimbabwean market a day, is now clearing an average of 30 cars daily and devoting more time to clearing vehicles in transit to Malawi, Zambia and the Democratic Republic of Congo.
Zimra commissioner of legal and corporate services Ms Florence Jambwa yesterday said if the importers fail to raise the required money within three months, the vehicles would be auctioned.
Normally the cars are kept in the customs yard for 21 days before they are towed to the warehouse where they are auctioned if the owners fail to pay customs duty after three months.
The warehouse charges $5 000 a day for storage.
Some car dealers interviewed said the new regulations had caught them unawares as they had purchased the vehicles some two to three months earlier.
They expressed concern that Zimra would soon auction the cars if they failed to clear them on time.
"The implementation of the new regulations was very harsh. The Government should have given us a window period of one month so that we could get used to the system.
"Most of us hoped to pay duty in local currency, but now we are left stranded.
"It is difficult for one to raise foreign currency, considering that it is not readily available in the country," said Mr Reuben Mandizha, who spent three days at the border post last week.
He said he had failed to raise US$5 000 duty required for his vehicle, which he claimed cost him US$3 000 but was revalued at US$11 000 by Zimra.
The dealers said most of them had paid huge amounts to have their vehicles ferried from Durban, South Africa, to Beitbridge.
South Africa has banned the driving of second-hand imported cars on its roads, compelling importers to pay between R3 000 and R10 000 for their cars to be ferried to Beitbridge Border Post.
However, while the dealers were willing to raise foreign currency to buy the huge amount of cars entering the country on a daily basis, they were not prepared to raise the same currency to pay for their imports.
Statutory Instrument 80A of 2007, published in an Extraordinary Government Gazette a week before the Easter holidays, stipulates that with effect from April 5 2007, importers of cars and other luxury goods will be required to pay duty and value added tax in foreign currency.
Under the requirements, the customs duty and VAT shall be payable in United States dollars, euros or any other currency denominated under the Exchange Control (General) Order 1006 (Statutory Instrument 110 of 1996).
However, duty in hard currency is paid by only those who use free funds and not foreign currency accessed from the Reserve Bank of Zimbabwe.
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Under the statutory instrument, vehicles such as single cab trucks, other trucks and minibuses do not attract duty in foreign currency.
Finance Minister Cde Samuel Mumbengegwi recently told journalists at a Press conference that the new law, mooted in 2005, was being used as an instrument to turn around the economy by encouraging those with free funds to import goods that have a bearing on the development of the economy or invest in more production oriented activities.
The Government argues that its decision was meant to channel investment into productive activities instead of non-essentials.
Source: All Africa
URL: http://allafrica.com/stories/200704240266.htm...
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