Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, has said authorities will now treat all alcoholic and non-alcoholic beverages, as well as basic commodities like refined sugar, detergents, and dairy products, as smuggled items unless the owner can prove they paid customs duty.
This is being done to stop the influx of smuggled goods into the domestic market, which is hurting local industries by creating unfair competition.
Ncube’s remarks were delivered by Joseph Mverecha, the ministry’s chief director of economic affairs, during a presentation titled “Macro Economic Stabilisation Policies” at the Zimbabwe Staff College in Harare on Thursday, March 13, as part of the Joint Command and Staff Course.
Ncube said that while authorities have already launched a nationwide crackdown on smuggled goods, some counterfeit products are being made in local backyard industries.
Smuggled goods are in high demand because they’re cheap, as they don’t pay import duties or taxes. However, reduces demand for goods sold by registered operators, making it hard for them to stay viable, pay taxes, and create jobs.
Ncube said despite these headwinds, Zimbabwe is expected to grow by 6% this year, driven by a strong recovery in agriculture and good performance in mining and tourism. Said Ncube:
Alcoholic and non-alcoholic beverages, dairy products, washing powder, detergents and sugar, among others, are now deemed as smuggled unless sellers provide documentary evidence that customs duty was paid for.
Ncube said to address informalisation, the Government has taken steps to level the playing field. The introduction of a 5% withholding tax payable to wholesalers and manufacturers is aimed at improving tax compliance among unregistered small to medium enterprises.
He said the value-added tax registration threshold has been reduced from US$40,000 to US$25,000, encouraging more businesses to formalise their operations.
More: The Herald