Zimra loses millions to car smugglers

Taurai Mangudhla
A syndicate of car importers is prejudicing the country of millions in potential tax revenues through the smuggling of vehicles using various intricate methods, which include registering as returning residents and issuance of Temporary Import Permits.

Returning residents are exempted from paying customs duty on their vehicles on condition they do not resale the car within two years while TIPs allow vehicle access on Zimbabwe’s roads for a given period before returning to the home country.

Under these methods, the vehicles do not pay customs duty. However, unscrupulous car traders are now using these methods to bring in cars which are immediately sold on the local market, thereby prejudicing the country of tax revenue.

According to information obtained by Business Weekly from the Zimbabwe Revenue Authority, the total number of outstanding TIPs as at June 30, 2017 was 20 352 with a potential value of close to $28 million. Although Zimra could not officially ascertain the value of the outstanding vehicles, inside sources say that the expired TIPs were mostly for top-of-the-range vehicles.

Zimra said a total of 40 319 motor vehicles entered Zimbabwe on Temporary Import Permit in 2016, mainly through Beitbridge Border Post. The average number of vehicles cleared on TIP between 2009 and 2016 is 37 154 per year.

To avoid abuse of the TIPs travellers’ passport numbers are now being used to check whether the “tourist” has no outstanding Temporary Import Permit.

“If the client has any outstanding TIP for the same vehicle, the new TIP is used to acquit the outstanding transaction. If the client has different outstanding TIP, then no new TIP is issued until proof of exit or duty payment has been produced for the outstanding Temporary Import Permit,” Zimra said.

“Other Government agencies, including law enforcement agencies, refer vehicles on TIP to Zimra for regularisation. Zimra has enhanced supervision to ensure that all TIPs for vehicles exiting the country are surrendered and the system is acquitted,” Zimra added.

Follow-ups are done through communication with countries of export to locate the vehicles. Once a certificate of location is obtained, the outstanding TIP is duly acquitted.