BlackFacts Details

Imported car smugglers heavily costing Treasury

By Henry Mhara The shiny limousines and ramshackle taxis that share Zimbabwe’s roads have one thing in common — both sets are among thousands of vehicles that are smuggled into the country annually, prejudicing the treasury millions of dollars in taxes. With the local car assembly industry hardly operating, Zimbabweans have been forced to import cars, and figures from the government statistics office ZimStats shows that more than US$5 billion has been spent on vehicle imports since 2009. But some of the cars are brought into the southern African illegally by corrupt importers who undervalue their cars in connivance with clearing agents, law enforcement agents and government officials, according to recent court records. An expert in the sector says Zimbabwe is losing about US$5 million dollars every year to smuggling, under-invoicing of car imports, money which could be used to procure national essentials such as drugs. “We are struggling economically and in these desperate times, we could be using this money for COVID-19,” said the official from the Zimbabwe Revenue Authority (Zimra), who declined to be named. Zimbabwe is battling to finance its already ailing health sector to deal with coronavirus as local cases continue to rise. In a letter written in June to the World Bank, IMF and the African Development Bank, Finance minister Mthuli Ncube said Zimbabwe needed at least US$200 million to fight the pandemic. Official statistics show that, on average, 4 000 new and pre-owned vehicles imported from countries such as Japan, Britain and South Africa are cleared for entry through Zimbabwe’s Beitbridge border post every month with Zimra collecting at least US$8,5 million dollars in taxes. Zimra is currently charging up to 96% duty for used car imports so on average, a modest vehicle attracts import duty of between $2 500 and $5 000. Beitbridge on Zimbabwe’s border with South Africa, is southern Africa’s biggest inland port. While Zimra officials were available to discuss details of vehicle smuggling, recent high profile court cases involving a top government official and a businessman give as insight into the magnitude of the problem. Former Principal Director for State Residences in the Office of the President and Cabinet Douglas Tapfuma was sentenced to four years in prison in June after being convicted on three counts of criminal abuse of office for importing duty-free eight vehicles through the use of forged documents. Wealthy businessman Genius “Ginimbi” Kadungure, who has a collection of top-of-the-range sports cars, was recently convicted of under-declaring the price of a Bentley Continental GT that he bought in South Africa last year, and paying US$81 000 in import duty instead of nearly $140 000. This scam was a classic case of trade under-invoicing, which is responsible for a substantial proportion of illicit financial flows around the world. According to US based Global Financial Integrity (GFI), trade misinvoicing cost Zimbabwe US$1 billion over a ten-year period indicating the in adequate detecting systems i

Education Facts

Lifestyle Facts

Business Facts

Politics Facts

The Green Book Pt I