ZIMBABWE National Chamber of Commerce (ZNCC) has called on government to increase efforts to clampdown on smuggling, which is costing both Treasury and businesses millions of dollars in lost revenue
As the economic situation continued to worsen, smuggling has been on the rise in recent months, with the Zimbabwe Revenue Authority’s (Zimra) first quarter report for 2016 attributing a tax revenue loss of $136 million due to the scourge.
Speaking at an Industry and Commerce ministry breakfast meeting on the import management and local industry support measures in Harare on Friday, ZNCC president Davison Norupiri said although Zimra was doing all it could, more was needed to plug gaps.
We know Zimra is working flat out to try to avoid and block smuggling. But smuggling is actually affecting business at the moment. As a chamber we want Zimra to tighten their screws so that they can reduce smuggling, but at the same time we are now having challenges at the border,” Norupiri said.
“When we are now talking about the flow of traffic, business does not have that luxury to stock a lot of raw materials, so we have resorted to the issue of just in time (required usage for production at the time) for raw materials. The moment you have your trucks at the border for three to four weeks it is not a favour, but disfavour in as far as business is concerned.”
One of the major reasons why the import bill was so large is the increase in undocumented goods entering the country, putting local companies out of business.
These goods were smuggled by individuals or shelf companies that bring in forged receipts, which do not represent the actual amount of goods imported.
By not providing accurate receipts of the goods sold, when making sales to the local market the individuals or shelf companies who bring in the imported goods are not fully taxed and thereby can keep excess money, allowing them to have more capital to re-invest.
This, however, is putting established companies out of business, as they have less money to re-invest due to economic forces and paying taxes that are seen as too high. Taxes are not seen to reflect that the economy is using a strong currency.
This was further emphasised in the first quarter report for 2016. In it, Zimra board chairperson Willia Bonyongwe said the revenue authority needed to review cost structures because of the strong currency in use.
Opposition MDC-T spokesperson Obert Gutu accused the Zanu PF top brass of being involved in smuggling rackets in the country.
“The Zanu PF regime is full of smugglers. Top Zanu PF regime politicians are some of the worst smugglers in Zimbabwe. You should remember that smuggling and corruption are two sides of the same coin. Smuggling is actually part and parcel of corruption,” Gutu said.
He said the Zanu PF regime can never successfully clamp down on corruption or smuggling because the majority of the regime’s top functionaries are some of Zimbabwe’s worst smugglers.
Zanu PF spokesperson Simon Khaya Moyo could not be reached for comment yesterday.
Analysts say that the main reason for smuggling was to avoid paying taxes by not properly receipting imported goods.