Car duty goes up, bale imports banned

HARARE - The cash-strapped Zimbabwean government has increased import duty for second hand vehicles, banned the importation of second hand clothing and scrapped rebates on groceries as part of measures to revive the stagnating economy.

In his mid-term fiscal presentation in Parliament yesterday, Finance minister Patrick Chinamasa revised downwards Zimbabwe’s economic growth rate from 3,1 percent to 1,5 percent due to drought-induced under-performance in agriculture.

In an effort to boost government’s dwindling coffers and reduce the country’s widening trade deficit —currently standing at $1,8 billion in the six months to June 2015 — Chinamasa introduced a raft of measures likely to negatively impact on the livelihoods of the poor.

The Treasury chief said while efforts had been made in the past to mitigate importation of second hand motor vehicles — thereby reducing the current account deficit — second hand vehicles continued to account for a significant chunk of the import bill due to their affordability.

“I, therefore, propose to increase surtax from 25 percent to 35 percent on second hand light passenger motor vehicles aged more than five years from the date of manufacture at the time of importation, with effect from September 1, 2015,” he said.

Before the increase, second hand cars used to attract customs duty and surtax at rates of 40 percent and 25 percent, respectively.

Following the massive company closures and lack of employment opportunities, most Zimbabweans had resorted to buying and selling second-hand clothes to eke out a living, but government believes that used clothing and shoes present a health hazard to the citizens, since the goods may be imported without proper fumigation.

“I, therefore, propose to remove second hand clothing and shoes from the Open General Import Licence.

“Furthermore, any future importation of second hand clothing and shoes will be liable to forfeiture and destruction,” Chinamasa said.

The banning of used clothing —commonly known as mabhero — will be effective from September 1, 2015.

Chinamasa said the measures are aimed at enhancing competitiveness of the local industry, currently facing stiff competition from cheap imports that have flooded the local market.

As part of efforts to cushion retailers from an influx of basic commodities from regional countries, government has moved to remove rebates from imported groceries.

“Cross-border travellers continue to import groceries duty-free under rebate.

“However, there is no justification for continued rampant importation, since locally manufactured products are readily available.

“I, therefore, propose to remove groceries that include maize-meal, meat, sugar and flour, among others, from the travellers’ rebate,” Chinamasa said.

Meanwhile, Zimbabwe has revised its 2015 revenue target from $3,99 billion to $3,6 billion after the country missed its first half revenue target by six percent to $1,78 billion.

Statistics from Treasury indicate that the bulk of the revenue was generated from tax revenue, which, contributed $1,646 billion or 96 percent, while non-tax revenue contributed $71,8 million or four percent of total revenue.

The major contributors to tax revenue were Value Added Tax, 25 percent; Pay As You Earn, 22,5 percent; and Excise Duty, 20,2 percent.

Customs Duty and Corporate Tax contributed 9,4 percent and 9,8 percent, respectively.

Comments (25)

Well done. You are moving in the right direction. Now you need to stop the unnecessary and expensive travel expeditions of the executive and other costs.

Whip de Nation - 30 July 2015

vangani vakafa nekupfeka used clothes/shoes? Muchanotsva kudenga ne tambudza varombo!

bj mago - 30 July 2015

Very progressive policy statement. However it is dangerous for the govt to block more and more avenues for the informal sector (the major non-state employment sector). The sale of second hand clothes and shoes is a livelihood for many and provides dignity to the poor as they are able to access cheaper items. How many will afford Bata shoes at 24$ for the cheapest pair? Please spare a thought for the underprivileged!

skatsiru - 30 July 2015

confusion at its apex. just 8 months ago the slut grace told vendors to sell whatever they can wherever, now machonyonyo china_masa is singing a different tune. pamunhu mutema nhamo haiperi!!!

josphat mugadzaweta - 31 July 2015

all what u are saying in the budget in that the civil service has to be cut ...its a result of your own making WHY did create the following EMA ZINWA These are an unnecessary apendeges to govt .there was( NRB) NATURAL RESOURCES BOARD and this did a splendid job no collusion no hassles look at EMA frustrating economic growth in Mash Central and not only that at one time this same GOVT told us to dig out sand that had filled up rivers EMA now wants us to pay what really. GOD save us ZINWA since its inception water became topical every city cried for water which ZINWA could not provide OUR throats went dry before this water ran without a stop ........I THEREFORE wish to advise the powers that be to cutoff the two rather than talk of retrenchments.

pink jeyz - 31 July 2015

Nothing new in the mid term fiscal policy .Chinamasa is missing it all.The long and short of his budget is ,the country is broke we need foreign injection /capital.We need change of policy and approach .The current environment does not attract any investments .

John Garani - 31 July 2015

depending on the pair of glasses one is wearing, the policy statement by minister chinamasa will certainly meet mixed reactions, some positive others not. my pair of glasses is that of an academic in the field of business. from it i pick several positive elements. one; banning of imports will help promote local industries thereby creating much needed employment with spin offs such as increased incomes for the workers which will make them buy better quality clothes not hand- me- downs from europe and america. two taxing exports such as skins and hides will force exporters to process them locally, again creating employment and all its associated benefits. three; cutting the civil service wage bill will end up reducing tax burdens on both individuals and businesses and this would increase theri disposable incomes and purchasing power. this will in turn avail capital for further investment through savings that can be lent to businesses. needless to say this has always been the standpoint of all level headed academics since the awn of independence. big wonder why it took our leadership so long to see the light.

edika - 31 July 2015

inasmuch as the banning of imported cheap second hand goods is a good 'economic' principle one should keep in mind that the zim economy is not what you would really characterize as 'textbook' economy. the zim economy is more complicated than that. how long will it take for businesses to start operating profitably enough to reduce unemployment? in the meantime what will those who earn a living through selling MABHERO be doing? i for one think that if the policymakers are sincere they should start by inducing productivity and formulate policies that lower the cost of doing business in zim. only then can we afford to buy locally produced goods. right now we are facing liquidity challenges and most companies are not paying workers on time and those few that are paying are paying peanuts. in such an environment how can you expect me to buy a locally produced T-shirt that costs $10 when i can buy second hand clothes for the whole family. let us not engage in armchair economics and do things that do not punish the ordinary family man on the streets who is just trying to put bread (without butter) on his table

ndashamisika - 31 July 2015

Punishing the poor for governments poor policies.

Dave - 31 July 2015

fragrance collection for you at affordable whatsapp 0712333431. 1million, polo black, lifetime, pure black etc

bjaey - 31 July 2015

This will not work in Zimbabwe, the majority of the people will not afford to buy locally produced products because they are very expensive and equally if people are not buying the industries will suffer because they have no one to sell to, most zim products are difficult to export because china is exporting everything to each and every country in the world therefore still it won't help the economy. What Chinamasa is doing is something that can only work on paper it's not realistic. Policy change, getting along with other countries and good responsible transparent governance is the only way. Zanu has failed completely, no ideas at all.

misty - 31 July 2015

If the real reason for banning mabhero is to make the affected industry competitive. Why not ban the importation of all clothes including the rubbish from Dubai and China? Oh because yur wives and concubines operate the many boutiques in town, ok ok ok. Tichasangana 2018 hakusi kure.

Samaita - 31 July 2015

This budget does not address the root causes of the problem.Its touching on the surface.1.The government needs to have policies that boost investor confidence thereby attracting more investors leading to productivity in farming,industries and economy as whole.

Gift - 31 July 2015

Fire brigade "economics". Kungo kiya kiya. Its four months from November the Mafia boss said bonus is there. Tosviniwa zvedu apa ropa rakapera kare kwasara mweya...

X-MAN IV - 31 July 2015

This is of no benefit for the poor. In western countries there are charities that run second hand clothing stores to help those with less money. Why does this happen in developed countries but will now be stopped in a developing country.

Buffalojump - 1 August 2015

This is of no benefit for the poor. In western countries there are charities that run second hand clothing stores to help those with less money. Why does this happen in developed countries but will now be stopped in a developing country.

Buffalojump - 1 August 2015

Once more the govt of idiots has come out with another foolish plan which they think can revive the dead and rotton economy .How many people are going to loses jobs and means of making a living ? The morons do not know and do not care . Places like Mupedza nhamo in Mbare will be shut and that is opposite to creating 2m jobs . But that on the other hand will be a plus bcoz Mpedza nhamo was turned into a zanu base and all those fools who worked for zanu from there thoko you will be out musheee kkkkkkkkk. Anyone still thinking we have a govt in zim that person lizanga .Do we have local manufacturers? no we do not have those who are there are substandard whose products is shiit . Chinamasa must know that if our manufacturers become world class as it was during Rhodesia no one from this country will both to import marengenya and marengenya business will die a natural death very simple like that . This thing of forcing people to do senseless business will never work even the richest country in africa South africa allows its people to impoort amaraburabu , zinjakavwa muchITonga. so that poor of the poorest can also have a descent dress but as things are going in zim many people are going to revert to izigamba or walk about with exposed matako bcoz of zanu and Mugabe 's foolish decision making .

Diibulaanyika - 1 August 2015

Dzimweni nguwa ndinombofunga kuti Smith aiva nani. Ngawadzinge ma youth officer asina zvaari kuita apart achipihwa mari ye ma high grade

Cde Chinoz - 1 August 2015

Well done cde Chinamasa and your team . I remember Mugabe forced you to apologise when you said civil servants are taking 80% of of recurrent expenditure. Now the judicial is doing the job for you . Reduce the civil servants and fire Made the agriculture minister . I know he is your home boy , but if you want to see movements in that ministry retire this man . He is just useless. A study at Oxford some 10 years ago showed that Zimbabwe has always been affected by drought and it's not a coincidence that 90 % of the deals in Southern Africa are in Zimbabwe. Give back all productive farms to the former commercial white farmers . They will turnaround things faster . After al, they are Zimbabweans and the president agreed that black farmers despite all they help they get from government . they are still not getting it right 10 years after they got the farms. Look at Zambia - those farms are owned by ex Zimbabweans .

Dzasukwa - 1 August 2015

90 % of the Dams

Dzasukwa - 1 August 2015

as usual knowing that the majority of zimbos are suffering ,cannt afford cloths from yo Dubai scrap shops makudecider kubanner ma bhero . mukavura macar sales the ones you mass imported and no one is buying because we can go kuma shipping ports, buy and drive back at a reasonable price .tipeiwo kufema .

archie - 2 August 2015

Taifunga kuti tava kutengawo mota zvino zvinenge zvicharamba duty is too high wedu weeee

Machuma - 3 August 2015

veduwe zvakaoma hazvo ko is maunderpriviledges tofa hedu

xap - 5 August 2015

cde chinamasa who did u consult?if u count the number of people who a selling secondhand clothes nationwide u wil b surprised to note that they exceed the number of people who lost their jobs due to closure of industry ,they have families to fend for ,most of them widows.u must have a plan B b4 u ban [2st hand industry]

Game changer - 5 August 2015

Izvi zvakafanana nemunhu anoda kuti asarumwa ne Mosquito obva aita yokurova nemaoko ake instead of using manets etc look for a better alternative kana mukadaro mass inongotambura .vanhu vazhinji vamunoona vakachena mumadhorobha avo ibhero bhero chairo

zyk - 5 August 2015

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