Shocking food and car duty increase by Zimra
By Wonai Masvingise
HARARE – Food prices and other basic commodities are set to increase following an announcement by the Zimbabwe Revenue Authority that a 25 percent surtax would be charged on the commodities starting January 1.
The development follows disclosures that government officials, including ministers, were bringing commodities into the country without paying duty. This includes luxury motor vehicles and even food.
The surtax, according to Zimra, will be charged on things such as food stuffs, second-hand light passenger motor-vehicles which are more than five years old from the date of original manufacture, and many other commodities.
Reads the notice in part: “…Surtax of 25 percent of the value for duty purposes shall be charged and paid in respect of the importation into Zimbabwe.
“Included in the goods to be taxed are double cab vehicles for the transport of goods, foodstuffs such as fresh, chilled as well as frozen whole chickens, frozen cuts and offals, milk and cream, yoghurt, fermented milk, buttermilk, cheese, bird’s eggs, potatoes, tomatoes, onions and shallots, garlic, carrots and turnips, mixtures of vegetables, other vegetables, peas (excluding garden peas and marple peas), beans, sausages and similar products, uncooked pasta, jams, fruit jellies, marmalades, soup and broth preparations, sweet biscuits, tomato ketchup and other tomato sauces,” the notice added.
The development comes amid a steep rise in prices of locally-assembled vehicles with most Zimbabweans finding it expensive to buy vehicles locally. Most Zimbabweans, given these challenges, have resorted to importing vehicles from countries such as Japan and many others.
Threats by government to ban the importation of used cars caused an influx of cheap imports which flooded Beitbridge Border Post in the past few months. Analysts believe the introduction of surtax might be a measure to control the massive importation of cars without government necessarily banning the used vehicles import.
Early last year, it was reported that the number of cars coming in through Beitbridge stood at 3 150 in January 2011 as compared to 2 310 in January 2010.
Official figures from Zimra indicated that the number of vehicles imported had gone up significantly since January 2011 due to the fact that many importers delayed delivery last year to benefit from the new rates of duty introduced in January this year.
Alcoholic beverages such as malt beer, wine, cider, brandy, whisky, vodka and spirits will also attract surtax. Smokers will not be spared either as virginia type flue-cured tobacco, burley tobacco as well as all other tobacco types will be taxed.
Other products that will be attracting surtax range from beauty products to electric household equipment such as refrigerators, ovens, cookers and other reception apparatus for television sets.
Economic analyst John Robertson said the move by Zimra will trigger massive price increases which will increase inflation. Robertson said; “It will add to the cost of those things unless if we can produce them ourselves.
A lot of these goods are not being made in the quantities needed by the country and in most cases we can’t find them in our local shops because we do not have the machinery to make them. Power cuts are also negatively affecting our manufacturing industry and we have experienced a loss of skilled people.”
He added: “We will see an increase in the price of buying these goods and it is going to affect inflation first and in the next two years we might see a positive result in that we might be able to produce our own products but this will be in the long run.” Daily News
