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Duty Calculation for Passenger vehicles

What is the rate of duty charged on importation of passenger type motor vehicles?

Duty to be paid on importation of motor vehicles into Zimbabwe is based on the Cost, Insurance and Freight (CIF) value plus other incidental charges and expenses incurred in the purchase of the vehicle and its subsequent transportation up to the first point of entry into Zimbabwe? This CIF value and the other charges constitute what is known as the Value for Duty Purposes (VDP). Such other charges include, inter alia, and where applicable:

  • Port handling charges, e.g. at Durban Port, Walvis Bay, Beira, Dar es Salaam;
  • Storage charges; and
  • Any other special handling fees, if not already included in the CIF Value.

The charges that are levied are Customs Duty, Surtax and Value Added Tax (VAT). Surtax is only charged on passenger type motor vehicles that are more than five (5) years old at the time of importation. Please note that both Customs Duty and Surtax (where applicable) are calculated on the Value for Duty Purposes (VDP). Value Added Tax is calculated on the total of VDP plus the calculated Customs Duty payable. This value is known as the Value for Tax Purposes (VTP).

Below is a table showing examples of how to calculate duty payable on the most commonly imported motor vehicle types using arbitrary CIF values:

**NB: All values are in USD

Year of Manufacture/Type of vehicle

 

Engine Capacity/Payload

CIF Value

$

Other Charges

$

VDP

$

Duty

$

Surtax

$

VTP

$

 

 

VAT

$

Total amount payable

$

2009

Sedan/ Station Wagon

1495cc

6 000

_

6 000

@25% = 1 500

_

7 500

@ 15%

=1 125

 

2 625

2005

Sedan/Station Wagon

1495cc

4 000

1 200

5 200

@ 25% = 1 300

@ 25% = 1 300

6 500

@ 15%

= 975

 

3 575

2001

Sedan/Station Wagon

1800cc

5 000

900

5 900

@ 40% = 2 360

@ 25% = 1 475

8 260

@ 15%

= 1 239

 

5 074

2008

Sedan/ Station Wagon

3000cc

10 000

600

10 600

@ 40%

= 4 240

_

14 840

@ 15%

= 2 226

6 466

2004

Pick -up truck

Payload of up to 800kg

3 000

1 000

4 000

@25%

=1 000

 

5 000

@ 15%

= 750

1 750

2005

Pick -up truck

Payload more than 800kg but not exceeding 1400kg

4 000

1 200

5 200

@20%

= 1 040

 

5 340

@ 15%

= 936

1 976

2002

Pick- up truck

Payload more than 1400 kg but with a gross vehicle mass of less than 5 tonnes

7 000

1 500

8 500

@40%

= 3 400

 

11 900

@15%

= 1 785

5 185

 

 

Duty is calculated on the Value for Duty Purposes.

1.            What is the Value for Duty Purposes (VDP)?

This is the value which forms the basis for the calculation of duty and includes the cost of the vehicle and any other charges or expenses incidental to the purchase of the vehicle and its transportation up to the place of importation. The following is a list of charges that are included in the calculation for duty purposes:

  • selling commission,
  • brokerage,
  • storage,
  • handling,
  • documentation,
  • port charges,
  • freight and insurance.

2.            What is surtax?

Surtax is levied at the rate of 25% of Value for Duty Purposes on motor vehicles which are more than five years old.

3.            How is Value Added Tax (VAT) calculated?

Value Added Tax is charged at a rate of 15% on the Value for Tax Purposes (VTP) which is Value for Duty Purposes (VDP) plus customs duty payable.

4.            How is valuation of the motor vehicle done?

Physical Examination of the vehicle is carried out. ZIMRA reserves the right to accept or decline the declared value. Reassessment of the value may be done where necessary.

7. What factors are considered in the valuation of a motor vehicle?

The condition of the vehicle, mileage, year of manufacture are some of the factors used in the valuation of a motor vehicle.

8. Can an individual engage a clearing agent to clear their motor vehicle?

Yes. Clients may only engage registered clearing agents as ZIMRA only deals with bona fide clients and registered clearing agents. A list of registered clearing agents is available here

Example

Vehicle: Nissan Terrano, year 1998, engine capacity 3270cc with a CIF value of USD2720 from Japan.

Answer

The mentioned vehicle attracts duty of 40% and surtax of 25% (since it is more than 5 years old). These 2 charges are levied on what is called the Value for Duty Purposes (VDP) which consists of the CIF Value plus any other costs incurred up to the point of importation into Zimbabwe. If the value of $2 720 is accepted, then it becomes the VDP. VAT is also payable at 15% and this is calculated on the Value for Tax Purposes (VTP) which is the VDP plus the duty payable. That is to say:

VDP    = 2720.00

Duty = (40% of 2720) = 1088

Surtax = (25% of 2720) = 680.00

VAT      = 15% X (2720 + 1088) = 571.20

Total Payable  = 2339.20

 

Source: Zimra Website

For more information please contact zimra

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Categories: General
  1. Ngonidzashe Siziba
    April 13, 2015 at 12:02 pm

    Helo. what duty percentage does a passenger vehicle above 30 passengers attract. Iam contemplating importing two 34 or more seater buses from Japan to Zimbabwe.

    Best regards

    Ngonidzashe

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