adminare many products being sold on the domestic market at prices lower than their landed cost was evidence they were evading import duty.
This is despite measures that have been put in place by Finance Minister Tendai Biti as part of the Government’s efforts to protect fragile industry threatened by cheap imports.
The most affected industrial sub-sectors include footwear, leather, textiles and clothing. For instance, despite 40 percent duty on cost plus a flat US$5 tax per unit, shoes are still sold on the local market for as little as US$3 a pair.
CZI president Mr Kumbirai Katsande said that there still was need to protect local industry as “the economy was still in the shadow of its challenges”.
“The consequence of this is that it punishes honest importers, it punishes those producing locally who should be protected by Government,” he said.
He said the domestic economy was not yet performing as well as it should be, hence a lot of people sought to use all avenues available to make profits.
He called on the Government to get on the ground and identify shops selling imports at below cost then build a database of culprits to curb the practice. “Government should visit outlets where these products are being sold, ask them how they are affording these prices and demand to see the import documents,” he said.
The current difficulties, a spillover of the decade-long economic downturn, have drawn mixed reactions over import tariffs. Mr Katsande said the Government should work with senior customs officials on how best to tackle the rampant leakages.
Already, billions worth of imports are finding their way into the country through formal ways and this has its fair share of negative effects on local businesses.
Financial limitations have stunted industrial renewal and manufacturing output, forcing the country to rely on low-priced imports, pushing local producers out of business due to lack of competitiveness.
Zimbabwe recorded a trade deficit of US$3,6 billion in 2012 after exporting only US$3 884 billion worth of goods in the year to December 31, 2012. Imports rose to US$5 223 billion in 2012 from US$5 162 billion in 2011. A negative balance of trade is known as a trade deficit or a trade gap and occurs when a country’s value of imported goods exceeds the value of its exports.
Both the fiscal and monetary authorities have in the recent past expressed grave concern about the country’s over dependency on the imported products. Unfortunately, that dependency has resulted in haemorrhaging of the elusive foreign currency in the domestic economy, further worsening liquidity situation.
Online Reporter