18 March 2019

Zimbabwe: Car Importer Takes Zimra to Court Over Forex Duty

A BULAWAYO man has taken the Zimbabwe Revenue Authority (Zimra) to court challenging its decision to charge him duty in foreign currency for his imported vehicle.

The vehicle, a Toyota Hilux was imported from the United Kingdom in December last year and has been stuck at Plumtree Border Post after the owner Mr Lincoln Moyo failed to raise enough foreign currency to pay duty. Mr Moyo, through his lawyers Ncube and Partners, filed an urgent chamber application at the Bulawayo High Court on Friday last week citing Zimra and its Commissioner-General Ms Faith Mazani, as respondents. He also wants an order exempting him from paying storage charges for his car pending the finalisation of the matter. In his founding affidavit, Mr Moyo said in terms of the law he qualified to be exempted from paying duty for his car in foreign currency. He argued that the vehicle was consigned on December 17 last year before Statutory Instrument 252A-Customs and Excise (Designation of Foreign Currency Dutiable Goods) Notice 2018 came into effect. According to S1 252A, goods purchased on or before November 22, 2018 and consigned on or before January 3, 2019 are exempt from the operation of this notice. "Prior to the advent of the SI 252A, importers would be allowed to pay duty in the local currency which is now known as RTGS$.

The advent of that Statutory Instrument brought about the requirement to pay duty in foreign currency and in my case, I submit that I am exempt from paying duty in foreign currency," he said.

Mr Moyo said despite applying for exemption the respondents failed to respond to his letter.

"Acting in terms of SI 252A, I applied to the Zimra station manager at Plumtree Border Post for exemption and the matter was referred to the Commissioner General who failed to respond .

The contents of the letter betray the fact that the second respondent (Ms Mazani) does not understand the provisions of the statutory instruments," he said.

Mr Moyo argued that the law stipulates that one can apply for exemption simultaneously with the importation of the car at any rate within 42 days from the date of importation

He argued that his car has been unlawfully stuck at the border post because he is failing to complete the importation process as Zimra insists on him paying duty in foreign currency.

"At the same time storage charges are being levied at the rate of US$10 per day and because they are being paid in foreign currency, the respondents are benefitting twice as they are gaining on storage charges and at the same time insisting on me paying the duty in foreign currency," said Moyo.

Zimra is yet to respond to the application.

The Government, last year, introduced the payment of customs duty in foreign currency for motor vehicles in a move aimed at controlling the surge in the importation on non-productive goods.

Announcing revenue enhancing measures in his 2019 National Budget statement in Parliament in November last year, the Minister of Finance and Economic Development, Professor Mthuli Ncube, said the measures were critical in redirecting use of scarce foreign currency to the productive sector and implementation of measures to control imports, which continue to outstrip exports thereby exerting pressure on foreign currency requirements amid a widening trade deficit.

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