Government Set To End Duty-free Importation Of Buses

The Zimbabwe Passenger Transport Organisation (ZPTO) has welcomed the government’s plans to end the duty-free importation of public service buses and prioritise local vehicle assembly.

In his presentation of the 2025 national budget, Finance Minister Mthuli Ncube proposed that the temporary suspension of customs duties on imported public service buses be lifted starting January 1, 2025. He said:

Cognisant of the plight of the commuting public, Government, in 2022, temporarily suspended customs duty on public service buses imported by approved transport operators.

Transport operators have, thus, taken advantage of the Facility to replenish their fleet, where 827 buses have already been imported, against a target of 500.

In view of the substantial benefits that have accrued to approved importers, and the need to redirect resources towards value addition, I propose to terminate the Suspension of Duty Facility on imported buses, with effect from 1 January 2025.

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Current legislation provides for the importation of Completely Built Units (CBUs) for buses at 0% duty, whilst Semi Knocked Down (SKD) kits for buses and trucks attract duty at 10%.

This has created an uneven playing field in the bus assembly industry, since it is cheaper to import CBUs as opposed to kits.

In a statement, ZPTO chairperson Samson Nhanhanga said that the government’s move will create local jobs and help conserve foreign currency that has been spent on importing buses from China.

In 2022, the government suspended import duties on public transport buses, granting approved importers a duty-free rebate for up to 20 vehicles.

Meanwhile, Finance Minister Mthuli Ncube said the motor vehicle assembly sub-sector has been identified as a key “quick-win” value chain, with significant potential to transform Completely Knocked Down (CKD) kits and Semi Knocked Down (SKD) units into Completely Built Units (CBUs) on the local market. He added:

In line with NDS1 priorities, Government will prioritise local production of motor vehicles, which will go a long way in creating the necessary value chains, creating jobs, as well as reducing the importation of finished products.

In addition, the local industry needs to gear itself for a larger export market available under the African Continental Free Trade Area, whereby the value-added threshold (local content) for Rules of Origin has been set at 35%, in order to benefit upstream industries that provide in excess of 50% local content.

In order to support the local assembly of motor vehicles, I propose to wholly suspend customs duty on Semi Knocked Down Kits for a period of 2 years, beginning 1 January 2025.

More: Pindula News