Finance and Development Minister Professor Mthula Ncube announced new rules regarding the customs duty on imported cars that will reduce to half and be paid in Zimbabwean currency. The 2022 Customs and Excise Act (Amendment) addresses the issue of the average weekly exchange rate applicable to auctions that the rate of exchange can be used.
Before the Amendment, all duties were paid according to the foreign exchange rate before invoicing, as vehicles are purchased overseas before importation. However, part paying car import duties in Zimbabwean currency is one of the measures the government took in February to facilitate transactions for the people of Zimbabwe.
In February, as part of regulations announced by professor Ncube, relaxation was given to mining companies so they could make transactions in Zimbabwean dollars.
Before the review of the act, mining companies used foreign exchange as an average total export, as almost all minerals were exported. All domestic duties paid by exporters on their international earnings can now be paid in any currency, whether local or foreign, proportional to the amount the Federal Reserve Bank offers in Zimbabwean money in exchange for the foreign currency. For instance, a dealer who receives $1,000 in a different currency with a 40% refund rate (60% hold) will be taxed at the same percentage in Zimbabwean currency, and foreign exchange will be 60%.
The Federal government is taking an initiative to resume the use of local dollars to address the issues of export competitiveness and stabilize the current economic situation, which is supported by the growth of the export, remittances, and import subs.
