CASH-STRAPPED Zimbabwe is now forcing all motor-vehicle importers to pay their excise duty in foreign currency, the state-run Herald reported this week. Finance minister Simbarashe Mumbengegwi has ordered that the new rule, which will cover all luxury goods, takes effect immediately, after declaring the change in a government gazette, according to the newspaper. “Payments of customs duty and value added tax on the importation of any item of goods designated as luxury items shall be payable in United States dollars, euros, or any other currency denominated under the Exchange Control,” Mumbengegwi was quoted as saying. The general rate of duty for cars ranges from 60-80% depending on the type of vehicle. Previously importers paid for duty in local currency, making it relatively cheap to import. According to central bank figures, Zimbabweans have been spending an estimated US$400 000 (R2.85bn) importing an average of 80 used vehicles a day from Britain, Dubai, Japan, Singapore and the United States. Since August last year, authorities have pegged the local unit at 250 Zimbabwe dollars to the United States dollar, yet in reality it costs about 14 000 Zimbabwean dollars. In addition to duty calculated against the cost of the car, freight and insurance, importers will also have to pay surtax and value added tax. Many people, especially those who had already paid for their vehicles, are expected to be badly affected by this policy shift.
