I know a lot of people are not acquainted or should we say rather confused by the way Zimra 's customs officials handle their goods....& often times we see vehicles being stuck at the borders for ages untold. Let's try to tackle the subject using examples...but before that, in layman's language let's define some common terms used by border officials:
1) FOB....short for Free Onboard, an upfront cost of the vehicle before transport, insurance & inspection fees are added.
2) CIF.....short for Cost, Insurance & Freight....it is an agreement between buyer & seller in which the seller takes responsibility for the cost, insurance & freight of a sea or waterway shipment. In other words it is an aggregate of the above mentioned including all charges incurred outside Zimbabwe.
3) VDP....short for Value For Duty Purpose. It is calculated in this manner....FOB + shipping cost + all port handling charges & is used to derive duty charge.
4) VTP....Value For Tax Purposes, it as the amount that totals after adding CIF to the duty & is used to derive VAT.
5) VAT....the percentage charge on VTP.
6) Valid Company Tax Clearance certificate....a document issued by Zimra confirming that the applicant or organisation's tax affairs are in order.
7) Duty Exemption....an offer to scrap duty on all commercial vehicles upon presentation of a valid tax certificate.
Duty charge on all commercial vehicles is 40% & VAT is 14.5%. However if you are a holder of a valid tax clearance certificate you only pay VAT which is 14.5% of VDP. When paying duty it is also important to note that vehicle age matters.... vehicles that are more than 5 years old attract an extra 35% surtax. (that is 35% of VDP)
Examples: Let's say I'm importing an ex Uk truck with a value of $9,000.... shipping cost let's put it on $1,500 to Durban Port. So CIF would be $9,000 + $1,500= $10,500. To get VDP which is then used to calculate duty we then add the port handling charges to CIF....maybe $500 & that gives us $11,000 as VDP.
Now to calculate duty: 40% of VDP $11,000 = $4,400.
To calculate VAT we need to first find VTP...which is VDP + duty payable...so it's $11,000 + $4,400 = $15,400. VAT then becomes 14.5% of $15,400 = $2,233.
If the vehicle is above 5 years in age you then add another 35% of VDP as surtax which is $3,895.
Total amount payable at the border then becomes $4,400 duty + $2,233 VAT + $3,895 surtax = $10,483. If less than 5 years you subtract the surtax & you remain with $6,633.
With Valid tax clearance certificate as your armour it's: 14.5% of VDP $11,000= $1,595.
Total amount payable at the border for a bus or truck in this category then becomes $1,595 only. If older than 5 years you then add surtax which is $3,895 + $1,595 = $5,490.
#NB These calculations are just for guideline purposes & are not conclusive as you might encounter surprises from customs officials....you might be told of other taxes like 10% presumptive tax or whatever...chitsotsi chega chega (corruption).
Comments
Post a Comment