Zimbabwe adjusts customs tariffs

Like an economic juggler, the Zimbabwe government’s finance authorities are busy adjusting customs tariffs to support what they term goods of “strategic importance”. These customs’ duties are a big contribution to the country’s total income – recorded at 22.7% (US$212.2- million) of total revenue receipts in 2009, of which US$49.4-m was obtained from oil imports. And, while Zimbabwe is a signatory to the Southern African Development Community (SADC) free trade area (FTA), various goods imported from other member states of the FTA continue to face customs duties, according to the latest research by Standard Bank’s Zimbabwe economics specialist, Yvette Babb. The path Zimbabwe is supposed to follow in this regional trading agreement is that 85% of goods imported by Zimbabwe originating in SADC are required to face a zero per cent tariff, with the remaining 15% tariffs to be reduced by 2012. “But,” said Babb, “products still subject to import barriers are deemed to be sensitive goods which receive protection in the form of tariffs because of their ‘strategic importance’ to the economy. “The government of Zimbabwe has continued to use tariffs as a measure of protection for its domestic industries in the past decade, increasing the rate of tariffs for products that are produced locally while lowering tariffs on intermediate goods and capital equipment that are imported by local producers.” However, Babb noted, the government moved to suspend customs duties on basic commodities with the launch of the shortterm economic recovery programme (Sterp) – and the minister of finance moved to extend this measure until July 31, 2010. Also, the suspension was extended to selected inputs used in local production of basic commodities. The commodities on which duty is suspended include cooking oil, margarine, rice, flour, salt, mealie-meal, bath and laundry soap, washing powder, toothpaste and petroleum jelly. And, Babb told FTW: “Customs duties on select capital goods and intermediate goods were reduced further in the 2010 budget – with duty on halftonne pickup trucks, for example, dropping from 40% to 25%; small passenger motor vehicles (40% to 25%) and livestock for breeding (5% to 0%).”