Zim loses billions to blanket smuggling

ZIMBABWE has reportedly lost billions of dollars in the textile sector following allegations of massive smuggling where rogue law enforcers working in cahoots with Chinese shelf companies and local clearing agencies were undervaluing the imported blankets.

Source: Zim loses billions to blanket smuggling – NewsDay Zimbabwe November 18, 2016

BY OBEY MANAYITI

The Ministry of Industry and Commerce introduced Statutory Instrument (SI) 19 of 2016 prohibiting the importation of blankets and poly knitted fabric, among others, without first getting an import licence.

The ministry also introduced 40% duty and a surcharge of $2,50 per kilogramme on these items in a bid to protect the local industry.

However, some cheap materials were finding their way into the market as a result of clearing agencies reportedly working in cahoots with Zimbabwe Revenue Authority (Zimra) employees to apply wrong codes for the imported blankets.

According to sources in the clearing sector, a big scandal of blankets and other poly knitted fabric was being investigated where unscrupulous elements were using the wrong tariff codes for purposes of evading tax.

“Some are paying taxes for these items under used goods or new rags, scrap twine, cordage, rope and cables, and worn-out articles of twine or of textile materials. Instead of paying the stipulated taxes in the SI 19 of 2016, they pay less. They pay something like 15% out of the possible 40% plus $2,50 a kilogramme,” the source said.

“This has been going on for some time now, but it happens with the blessings of revenue officers who in some instances undervalue the weight of a whole container of imported blankets so that less taxes are paid. It is so serious and local industries might soon close if the situation is not rectified.”

Shipping and Forwarding Agents’ Association of Zimbabwe boss Joseph Musariri deplored corruption in the clearing sector although he said there were numerous technicalities that could lead to tax evasion and minimisation.

“As an association, we don’t want corruption. We don’t want our members to be corrupt and we urge our members not to abuse tariffs. As an association, we also want correct tariff classification of imported goods,” Musariri said.

COMMENTS

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    Morty Smith 6 years ago

    The writer never once asks if it is ok for the government to jack up the price of blankets which is the actual problem here. From the information in this article we know that blankets could be 40% and $2.50 a kg cheaper than the government wants them to be.