ZNCC interrogates new import duty impact

via ZNCC interrogates new import duty impact – DailyNews Live 5 November 2014 by Kudzai Chawafambira

HARARE – Business and industry –— through the Zimbabwe National Chamber of Commerce (ZNCC) — have launched a survey to ascertain the impact of the recently imposed import duty regime.

ZNCC will get technical assistance from the International Trade Centre in conducting the study, funded by the European Union.

The survey’s findings will enable the chamber to undertake advocacy on behalf of its members so that their views are taken into account in the policy making process.

“The survey will pay particular attention to whether the new trade regime would increase industry’s competitiveness, enhance consumer welfare and whether the measures are in line with Zimbabwe’s bilateral, regional and international commitments,” said ZNCC yesterday.

This comes as Finance minister Patrick Chinamasa in his 2014 National Budget proposed various duties on different foodstuffs and other products on the basis that some of them were locally produced.

The industries affected by the new tariff regime include those that manufacture metal, plastic, dairy and food processing, paint, electrical, rubber, oil, and blankets.

Furthermore, Chinamasa, during his mid-term fiscal policy review in September also specifically proposed to impose import duty of between 15 to 40 percent for cooking oil, poultry, soap, maize meal, flour, beverages, dairy produce, furniture, sugar, fresh and canned fruits and vegetables, among others.

This comes as the current policy thrust as outlined in the 2014 National Budget, has moved away from being centred only on funding, but has expanded the use of import duty as a way of both discouraging imports and protecting local industry.

“Several products, including those whose duty was zero rated, saw tariffs being introduced. The imposition of the tariffs is intended to support the productive sectors as well as to provide modest protection for the local industry,” said the commerce body.

While the Finance boss said the measures would take effect from last month, economists were quick to warn that the duties were likely to cause price hikes, if not shortages.

Zimbabwe has become a haven for imported goods due to massive de-industrialisation and the desperate government has gone a gear up by proposing to exclude selected foodstuffs imported by welfare organisations from duty rebates in order to encourage growth of the local industry.

“It has, however, been observed that some of the imported goods are produced locally. In some instances, the donated goods end up being sold on the local market,” he said.

The policy measures come at a time when government has no clue on how to revive industry due to lack of adequate funding to retool and capacitate industries.

The latest survey follows the initial research that was also commissioned by the ZNCC through the Zimbabwe Economic Policy Analysis and Research Unit in March 2014 on the import duty structure.