Business Reporter
THE Parliamentary Committee on Budget says the recent policy measures enacted by Finance Minister Mthuli Ncube ordering the payment of duty for fuel in transit is ‘anti-business’ and will not block transit fraud in anyway.
Presenting the Mid Term Budget Review , Ncube proposed to charge import duty on fuel imported under Removal in Transit (RIT), which will be reimbursed at the Port of Exit is a strategy to deal with transit fraud where goods that are declared as transit consignment are offloaded in Zimbabwe.
Thereby avoiding payment of import duty, this policy proposal attempts to address administrative challenges faced by ZIMRA.
“The committee is of the view that the payment of duty and reimbursement at exit point will not adequately address transit fraud since transporters can offload fuel and reload with a different liquid. If ZIMRA is constrained to detect such malpractices, payment of duty and reimbursement will not address the existing challenge.
“Rather, it will persist. Apart from that, the policy greatly undermines the ease of doing business for genuine transit consignments who will be required to secure additional operational funds to meet duty obligations,” he said.
The Committee said the administrative burden, on the part of ZIMRA, of receipting and paying revenue which is not available for public spending is unnecessary.
“Further, financial transactions of paying ZIMRA are not always free of charge. The policy is, therefore, against the Presidential mantra that “Zimbabwe is Open for Business”. The policy’s impact on doing business through Zimbabwe will be significant, potentially leading to retaliatory actions from other states.
“Economic agents would likely choose alternative routes in other countries due to the excessive costs and burden associated with doing business in Zimbabwe,” said the Committee.
The Committee said the proposed policy is in violation of the existing regional trade agreements, particularly Articles 3 and 4 of the SADC Protocol on Trade, which provides for elimination of tariff and non-tariff barriers to trade, and elimination of import duties.
“ It is the Committee’s view that, ZIMRA should strengthen its administrative efforts to curb transit fraud than to attempt to plug its administrative slack using an extremely bad policy. Alternatively, a commitment from clearing agent to pay duty in cases where goods do not reaching the exit point or reaching the exit port, can assist mitigating the transit fraud,” added Parly.
