ZIMRA new policy on fuel in transit sparks mixed r...

ZIMRA new policy on fuel in transit sparks mixed reactions

Nyashadzashe Ndoro

Chief Reporter

The Zimbabwe Revenue Authority has introduced a new policy on fuel in transit, sparking mixed reactions from stakeholders, as the authority seeks to address transit fraud and promote fair competition in the fuel sector.

The move, which is effective August 10, 2024, aims to curb transit fraud and ensure fair competition in the fuel sector.

According to the policy, all fuel imported through ports of entry by road will be required to pay duty and levies upon entry. The duty and levies will be refunded at the port of exit upon compliance with transit procedures and submission of proof that the fuel has been exported.

"With effect from 10 August 2024 all fuel, petrol, diesel, paraffin and jet Al, in transit imported through ports of entry by road is now required to pay duty and levies on entry. The duty and levies will be refunded at the port of exit upon compliance with all the transit procedures, including submission of proof that the fuel has been exported.

"Consignee's and/or their representatives should approach ZIMRA at the port of entry to initiate the fuel clearance and payment process. For the refund process, once the fuel has been exported they should approach ZIMRA at the port of exit to initiate the requisite refund process," ZIMRA said in a notice.

The policy has received mixed reactions from stakeholders. Gift Murapa, a clearing agent, has expressed concerns that the policy will lead to diversion of traffic to other ports, resulting in losses for clearing companies and other businesses that benefit from haulage trucks.

"The region will then divert to other ports which avoid Zimbabwean borders. Clearing companies, along with other businesses that benefit from haulage trucks coming through lose out. Epic failure orchestrated by letting low life criminals into policy making positions. I

"Tanzania, South Africa, Kenya, Namibia all have ports that are functional.

Just a few calculations and transporters will find the most suitable alternative," he said.

Tinomudaishe Chinyoka, a prominent lawyer, welcomed the policy as a sound decision that eliminates smuggling and ensures fair competition in the fuel sector. Chinyoka noted that as long as refunds are processed expeditiously and at 100%, the policy will be effective.

"Contrary to the replies hereunder, this is actually a sound policy decision that eliminates smuggling and ensures fair competition in the fuel sector," Chinyoka said.

"Of course, the honest transporter suffers due to the actions of smugglers but doing nothing was never a good idea. As long as the refunds are at 100% and processed expeditiously it will be fine: better even than the South African VAT refund process which is largely fictional or very late for most, particularly air passengers and freight."

The new policy is part of the 2024 Mid-term budget pronounced by the Minister of Finance, Economic Development and Investment Promotion, Mthuli Ncube.

ZIMRA has advised clients and the public to approach them at ports of entry and exit to initiate the fuel clearance and payment process, as well as the refund process.

Zimbabwe is losing millions of dollars in revenue due to the porosity of its borders, which has led to widespread smuggling. The country is being depleted of its valuable mineral resources, including gold, lithium, diamonds, and chrome, which are being smuggled out daily.