Stronger rand batters forwarders

VAT on goods from Zim an additional negative factor Kevin Mayhew THE LOCAL freight forwarding industry is clearly suffering the impact of the stronger rand but it is also being thwarted by the payment of Value Added Tax for goods from Zimbabwe. The president of the body which represents about 70 mainly smaller operators in the sector, Kennedy Machintu, says that the Zambian government has revalued imports of Zimbabwean products by more than 10% - a valuation upon which they impose VAT which can be recovered at a later stage. “However, it takes some time to get the money back and that is where the problem lies – it is difficult to carry the outlay for the time it takes to get it back,” he explains. The problem stems from the parallel exchange rate that operates in Zimbabwe – people would declare goods as having been bought at the official exchange rate, but the government suspected that they were in fact trading at the black market rate, meaning that they were getting many more Zim dollars for kwacha or whatever other currency of choice was used. So the Zambian government imposed what it believed was a realistic rate for VAT calculations which increased its revenue – although ultimately this would be reimbursed as part of the freight forwarders’ VAT claims for reimbursements. Looking at the industry in Zambia overall he said that it was very competitive and the main source of their revenue – through South Africa – had produced a very expensive currency with which to operate. “It will be a case of the strongest will survive,” he said.