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$1 billion over a ten-year period indicating
the in adequate detecting systems in the country’s trade systems. The losses
result from a form of customs and/tax fraud involving exporters and importers
purposefully false reporting the cost and quantity of commodities.
GFI senior economist, Rick Rowden in June this year told
NewZimbabwe.com website that, “For Zimbabwe’s trade with all of its global
trading partners in US$ terms we identified gaps totalling US$694 million for
the year 2017, and an average sum of nearly US$1 billion ($1 010.9 million)
over the ten-year period of 2008 -2017.”
GFI says that trade under-invoicing accounts for around 87%
of the estimated $70 billion that Africa loses annually through illicit
financial flows. Last November, Zimra seized 433 cars that had been imported
into Zimbabwe without paying customs and excise duty. At least 74 Zimra
officials were arrested and a dozen others dismissed. Zimra did not give
details on how the vehicles managed to get into the country without paying tax,
but a source at the organisation said there was a criminal syndicate behind the
scams: “It’s a syndicate involving the importer, the clearing agents, the tax
authority’s employees and car dealers who …manipulate the customs clearance
procedures.”
An official with one of the leading Japanese used car
exporting companies t said: “Eighty (80) percent of people who buy cars from us
request that we undervalue their invoices for duty purposes. We don’t have a
problem doing that for them as long as we get our payment. That is one of the
reason we have many Zimbabweans buying from us.”
The official — who declined to be named — said they
exported at least 3 000 secondhand vehicles to Harare every month while a
clearing agent at Beitbridge said they connived with Zimra officials to create
fictitious Customs Clearing Certificates (CCC) which they use to release and
register vehicles as duly imported. After releasing the vehicles, the syndicate
shares the loot from the unpaid duty, according to the agent.
The revenue that Zimbabwe is losing could be going into
plugging its acute shortages of fuel and medicines.
Zimbabwe Anti-corruption Commission (Zacc) spokesperson
John Makamure confirmed that Zacc had helped Zimra seize some vehicles that
were smuggled into the country without paying import duty.
“We do joint operations with Zimra and our duty is to
investigate that a person might not have paid duty and we seize the assets,” he
said. Newsday
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