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The Zimbabwe National Chamber of Commerce (ZNCC) has urged the Finance and Economic Development Ministry to adjust the cigarette tax regime.
This comes amid indications that the country is losing US$248 million annually to illicit cigarette deals owing to a mixed taxing regime that benefits cartels at the expense of industry players.
Finance Minister Mthuli Ncube recently increased excise duty on cigarettes to 25% + US$5/1000 from 20% + US$5/1000 cigarettes saying it was a regional benchmark and the move will curb illicit flows.
In its latest report, the Zimbabwe National Chamber of Commerce (ZNCC) implored Treasury to do away with the ad valorem rate of 25% and remain with the specific rate. It said:
<blockquote>
We request that the Ministry of Finance and Economic Development remove the ad valorem rate of 25% and remain with the specific rate of US$16 per mile of cigarettes.
The ad valorem component is subject to manipulation and is a huge cost as production increases.
The estimated fiscal benefit from this proposed move is US$248m per annum based on the current production rate and the prospects of future production once it is removed.
We also strongly urge the Ministry of Finance and Economic Development to put in place a predictable cigarette excise duty regime.
</blockquote>
The Confederation of Zimbabwe Industries (CZI) also called for the removal of the current mixed excise duty on cigarettes. CZI said:
<blockquote>
CZI recommends that there is a need to migrate from the current mixed excise duty regime for tobacco to a specific excise duty regime, which brings certainty to investors while also maintaining revenue inflows for the government as well as eradicating illicit cigarette markets.
The current ad valorem excise duty is prone to manipulation by cigarette companies through falsification of ex-factory prices or controlling sales transactions with third parties so that the ex-factory price is lowered to reduce the excise amount.
</blockquote>
Meanwhile, ZNCC has called on the government to provide tax relief to the sector as the wider economy recovers from the COVID-19 pandemic. | <a href="https://businesstimes.co.zw/zim-loses-us248m-to-illicit-cigarette-deals/">Business Times</a>

Pindula News

Zimbabwe Loses US$248 Million To Illicit Cigarette Deals

What is Special Excise Duty? 
Special Excise Duty is charged in terms of Section 172B of the Customs and Excise Act [Chapter 23:02]). It is a tax levied on the sale, transfer or disposal of second-hand motor vehicles on change of ownership.
A second-hand motor vehicle is a Zimbabwe registered motor vehicle and includes vehicles required to be registered according to the Vehicle Registration and Licensing Act, which is sold or disposed of to another person.
Special Excise Duty Rates 
The amount to be paid to ZIMRA for Special Excise Duty on the change of ownership of second-hand motor vehicles is as per the schedule below.
These new amounts apply to change of ownership with effect from 1 January 2021. Documents required for change of ownership of a second-hand motor vehicle.
1. Motor vehicle registration book (original not copy)
2. Central Vehicle Registry Form Number 4 signed and stamped by the Zimbabwe Republic Police’s Vehicle Theft Squad (ZRPVTS). This signed Police clearance is valid for 14 days from the date of issue.
3. Certified copies of National Identity Certificates for both buyer and seller.
4. Proof of residence for buyer and seller in the form of utility bill for water, electricity or any other such document
5. Agreement of sale signed by buyer and seller with the following details: 
a. Full names, addresses and national identity numbers for buyer and seller.
b. Details of the vehicle, i.e. make, model, year of manufacture, engine and chassis numbers
c. Full sale price – proof of payment should be in the form of invoices, receipts and telegraphic transfers.
Exemption from Special Excise Duty. 
The following transfers of ownership of second-hand motor vehicles are exempt from paying Special Excise Duty:
1. Transfers between spouses married under the customary law or Marriage Act.
2. Between parents and children of such a marriage
3. Companies under the same control
4. Vehicle acquired by way of inheritance
5. Sales between or transfer to Private Voluntary Organisations.

ZIMRA On Special Excise Duty On Change Of Ownership Of Second-Hand Motor Vehicles {Full Text}

The government has increased excise duty on petrol and diesel effective tomorrow, 5 May 2020 when new fuel prices will be announced.
The government has gazetted Statutory Instrument 100 of 2020 to give effect to the new excise duty on petrol and diesel.
This could mean that a fuel price hike is imminent.
See the Statutory Instrument below:
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/EXMi4xhWsAQaYM6?format=jpg&amp;name=medium"/><img alt="Image" decoding="async" src="https://pbs.twimg.com/media/EXMi4xiXQAEk1Y7?format=jpg&amp;name=medium"/>

Fuel Price Hike Imminent As Govt Adjusts Excise Duty On Petrol & Diesel

The <a href="https://www.pindula.co.zw/Zimbabwe_Revenue_Authority" rel="noopener noreferrer" target="_blank">Zimbabwe Revenue Authority (Zimra)</a> has not yet quantified the amount of Customs and Excise duty it had lost following the smuggling of 433 vehicles into the country.
Zimra spokesperson Francis Chimanda told NewsDay that the Authority could still seek for the arrest of those implicated in the smuggling of the vehicles. He said:
<blockquote>Prejudice can only be determined after the vehicles are subjected to proper customs clearance processes.
Zimra systems indicate that the vehicles listed did not pay duty at all. The exercise is intended to regularise this irregularity.</blockquote>
Zimra last week issued an advertorial in a government-controlled weekly, inviting the owners of the vehicles it had listed to report to its Harare loss control office with import documents of the vehicles.
As of Wednesday (yesterday), NewsDay could not find out whether or not owners of the vehicles whose names appeared in the advertorial had complied.
<h4>More: <a href="https://www.newsday.co.zw/2019/11/433-recalled-vehicles-didnt-pay-duty-zimra/" rel="noopener noreferrer" target="_blank">NewsDay</a></h4>

Zimra Recalled 433 Vehicles Over Non-payment Of Duty

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