By Rudo Saungweme
The Government’s decision to levy import duty in foreign currency on pre-owned vehicles and some designated products has proved to be fruitful, the Harare Post can reveal.
Zimbabwe Revenue Authority (ZIMRA) official who refused to be named indicated that Zimbabwe has been losing most of its foreign currency to countries that sell pre-owned vehicles. He added that previously Beitbridge Border Post would receive 200 cars per day but the number has declined to 40.
The official revealed to Harare Post that this move has encouraged foreign currency to be retained in the country.
The official said, “The position taken by the Government now makes a lot of economic sense. It was so difficult for Zimbabwe to retain foreign currency in the past as people would pay foreign currency to South African dealers but here in Zimbabwe they would use Real Transaction Gross Settlement (RTGS) to pay duty.
“This is after they have changed foreign currency with the official rate of 1:1. The fact that one is able to buy a product using foreign currency means that the person has the hard currency. This move will assist the Government to deal with those who do not bank their foreign currency,” he said.
An average landing cost of a pre-owned vehicle is USD $5 000. Prior to the introduction of the import levy in hard currency, Zimbabweans would pay USD $2 600 to the dealers and a duty of USD $ 2 400 would be paid to ZIMRA in bond notes or electronic transfers at the official exchange rate of USD $ 1: 1 RTGS.
Before the introduction of import levy in foreign currency, Zimbabwe would lose approximately USD$15.6 million per month through the importation of pre-owned vehicles. Instead of getting USD $ 14.4 million, ZIMRA would get that amount in bond notes and electronic transfers at the official exchange rate.