via Smuggling destroying economy:CZI – NewsDay Zimbabwe May 18, 2015
THE country’s “porous” ports of entry have remained the major driver of low industrial capacity utilisation and subsequent loss of potential revenue to the national fiscus, the Confederation of Zimbabwe Industries (CZI) has said.
Outgoing Midlands CZI president Ben Mashangu told NewsDay last week that revenue leakages at the ports of entry were worsening the country’s deficit, a development that Finance minister Patrick Chinamasa acknowledged in his 2015 National Budget statement.
“Our border posts are porous, we all know that.
“The country is not only losing lots of revenue through tax leakages, but the fraudulent influx of goods into the country has, and is, destroying our local industry. We can’t really talk of high capacity utilisation when cheap goods are being smuggled into the country on a regular basis, we need to promote our local industries first,” he said.
“The tendency of government is to say we have sanctions, that’s true, but I think it’s time we worked together and have these issues solved.”
The government last year proposed various measures to reduce the influx of foreign goods at the expense of local products, among them, the increase in taxes for the importation of second-hand vehicles.
Importation of second-hand vehicles accounted for 10% of the country’s $4 billion importation bill in the first half of last year.
Bata managing director Ronjoy Sengputa also revealed last week that the influx of Chinese products through porous border posts was retarding economic growth and consequent industrial development in the country.
“As for the Chinese products, the problem we have is that the borders are porous. There will be Chinese shoes whether legally or illegally,” Sengputa said.
Last year the country’s expenditure bill exceeded revenue by $15 million in the first 10 months.