Zim Losing Billions To Smugglers

Published: 2016 June 22 07:42:20 (6305 Views)

The fiscus could be losing close to $1 billion annually through smuggling of goods, the Zimbabwe Revenue Authority (Zimra) has said.

The revenue loss, more than a quarter of the 2016 National Budget, came as government has been battling to meet its monthly commitments such as paying salaries to civil servants and service providers on time.

Responding to NewsDay inquiries, Zimra board chairperson Willia Bonyongwe said the increased levels of smuggling explained why some products were being sold at low prices.

“What this tells us about smuggling is that people are able to sell goods at very low prices, almost close to the prices obtained in source markets such as China. Legitimate players, who are law abiding, end up being crowded out.

These people also are truant with their VAT [value added tax], Paye [pay as you earn] and other statutory obligations. The extent can be gauged by the impact on legitimate business in tyre trading, electrical goods, fuel and foodstuffs. I would agree that on the whole, loss to the fiscus could be up to a billion annually,” she said.

“Those who smuggle say it is because duties are high. I say tax is high because of the evaders. If everyone paid their taxes, government could actually find leeway to reduce duty.”

In the past months, revenue heads have been under performing after government failed to plug loopholes leading to smuggling.

Recently, government identified transit truck vehicles as fuelling smuggling by claiming the goods were headed for other destinations other than Zimbabwe.

Apart from transit truckers, individuals are said to be moving goods by faking documentation at borders and reducing the amount on purchased goods to pay lower duties.

In his monetary policy statement, central bank governor, John Mangudya, early this year, said individuals and corporates externalised $1,8 billion in 2015 fuelling the cash shortages.

“Those who smuggle have low margins and can sell for half the price, hence, there will be demand. While the smuggler is breaking the law and ought to be punished, the responsibility to curb smuggling goes beyond Zimra and beyond the smuggler, it is something that needs to be tackled holistically,” Bonyongwe said.

The suspected smugglers are retailers and businessmen.

Industry and Commerce minister Mike Bimha recently told NewsDay’s sister paper, The Standard that government was working on a new tracking system to deal with smuggling.

- News Day

Tags: Zimra, border, smuggling, ,

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