Zimra, Chinese fingered in blanket import duty scam

OFFICIALS at the Zimbabwe Revenue Authority (Zimra) have been sucked in a Chinese blanket import scam where the Asian nationals are allegedly fraudulently paying lower tariff charges for woven blankets, thereby prejudicing government of millions of dollars in import duty.

Source: Zimra, Chinese fingered in blanket import duty scam – NewsDay Zimbabwe July 1, 2016

by Elias Mambo

Sources in the blanket manufacturing industry said the Chinese nationals were importing woven blankets through the porous Forbes Border Post in Mutare, which are being fraudulently declared as woven long pile fabric which attracts duty of only 10%.

“The Chinese are importing blankets via the Beira route and they have been told by Zimra officials to declare their containers using a wrong tariff,” the source said.

“Containers are being shipped into the country from Mozambique and at the border, they are using Code 58, which is meant for woven long pile fabric, which attracts 10% duty,” the source said.

“Blankets attract duty of 40% and an additional $2,50 per kilogramme.”

Government recently declared that blankets, second-hand clothing and shoes were now regulated under Statutory Instrument 19 of 2016, which prohibits the importation of such products without an import licence.

However, sources said despite the government prohibition, those importing blankets were declaring them as woven fabric.

“The blankets come in without bordering seams, which are then cut into regular sizes locally. A container carries 17 000kg of blankets, which should attract duty of close to $62 900 if properly declared,” the sources said.

“If such a container is declared using the tariff Code 58, then it will only pay $12 000 as import duty, prejudicing the country of $50 000 per container.

“It is a scandal which involves very senior Zimra officials because the containers are not inspected at the port of entry.

“The scheme has crippled local manufacturers such as Waverley Blankets and National Blankets.”

A source at Waverley Blankets said the company, which employees close to 750 people, was being forced out of business and officials now contemplating downsizing.

“Around 750 people are employed by Waverley Blankets, but of late, there have been threats of downsizing and at times, salaries are delayed because the company is no longer producing at maximum capacity because of competition with the Chinese blankets,” the Waverley Blankets official, who declined to be named, said.

At the time of going to print last night, Zimra had not yet responded to questions emailed to its public relations department.

Last year, the Parliamentary Portfolio Committee on Defence, Home Affairs and Security Services raised concerns over massive smuggling of goods at border posts.