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| Last Updated: Tue, 22 May 2007 13:36:59 +0300 |
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‘Charging duty in forex legal’
Tue, 22 May 2007 13:36:59 +0300 - THE Government’s decision to charge import duty in foreign currency on selected items is legal as it is within the Finance Act passed in 2003 by Parliament, a Zimbabwe Revenue Authority official has said.
Zimra commissioner responsible for operations Mr Tichaona Chiradza said Parliament passed the law four years ago empowering the State to charge duty in hard currency but the legislation had not been implemented until recently.
Mr Chiradza was giving oral evidence before the Parliamentary Portfolio Committee on Budget, Finance and Economic Development on the rationale behind the move.
The Motor Traders’ Association has since engaged the Government and Zimra over the new regulations as the organisation felt that there were some grey areas that needed clarification.
Some car dealers claimed that the implementation of the Act without prior notice caught them unawares as they had imported vehicles subject to regulations which operated two to three months earlier.
It was explained to the dealers that only those who used free funds, and not foreign currency accessed from the Reserve Bank of Zimbabwe, would pay duty in hard currency. The Government explained that its decision was meant to channel investment to productive activities instead of non-essentials.
Mr Chiradza said the Finance Act accompanying the 2003 National Budget amended the Customs and Excise Act to allow the Minister of Finance to charge hard currency on selected goods.
"So it was actually Parliament that passed the Act, but due to some problems we could not implement it. A decision was then made this year that the provision be put in place, resulting in the Statutory Instrument being issued," said Mr Chiradza.
"The exercise is an attempt to cut back on the forex the country is using on the importation of goods classified as luxury; that forex would be used for the greater benefit for the country."
He said the effect of the regulations had been a congestion of vehicles and other goods at Zimra offices as people were failing to pay the duty in hard currency.
Many individuals and companies have approached Zimra, complaining that they could not raise the forex component, he said.
"We have detained some goods at our offices, sometimes more than our carrying capacity, particularly the Beitbridge border post; it has been strained.
"Another problem is that our clients have told us that they could not pay the duty, saying they were on a Government trip when they bought the products so they did not have the forex," he said.
"The only exception we have is when a person applies to the RBZ for foreign currency to buy that product. In that case, he would be allowed to pay in local currency. People have been mistaken thinking that withdrawing money from their Foreign Currency Account would exempt them from paying duty in forex.
"There should be an application to the RBZ for the forex and if the central bank authorises it, then one would be exempted from paying in forex."
Nkayi Member of Parliament Mr Abedinico Bhebhe wanted to know if the regulations applied to a person who would have received a product as a gift.
Mr Chiradza said the issue of the product being a gift was neither here nor there as what counted was whether the goods fell within items classified as luxury.
He said since the introduction of the regulations, there had been a reduction in the importation of luxury goods, an indication, he said, that foreign currency was being saved.
Responding to concerns by legislatorss about the legality of the measure, Zimra commissioner responsible for legal and corporate services Ms Florence Jambwa said the regulations were lawful since they had been passed by Parliament, a legislative body.
She said it was not true that the Attorney-General’s Office had expressed reservations over the legality of the move, stating that the AG’s Office was fully consulted at every stage before the law was passed. |
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