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Increased duties on Motor Vehicles

If you are planning on purchasing a new vehicle, it might be a good idea to do so immediately as duties on vehicles in increasing from November. Chinamasa has proposed an increase of a range of vehicle duties to between 40 percent to 60 percent, in a bid to complement the local motor industry.

he 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.

However, Zimbabwe’s local motor industry is already comatose as most people opt for cheaper second hand vehicle imports.

“The application of this measure will take into account the need to protect consumers from unfair pricing and substandard products. Furthermore, government Departments and parastatals will purchase motor vehicles from the local assembly plants in line with the Directive from the Office of the President and Cabinet issued through Circular Number 16 of 2011,” said Chinamasa.

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