By Alois Vinga
ZIMBABWE has 32 illegal entry points which could be prompting an estimated $2 billion loss annually emanating from unpaid taxes and eroded employment, NewZimbabwe.com Business has learnt.
The details, which have emerged from a multi-stakeholder, inputted dossier compiled by the Confederation of Zimbabwe Industries, Border Management Committee chairperson, Salie Khan confirms the details.
“There are 16 legal ports of entry and an estimated 32 illegal entry routes along the Zimbabwean borders. Law enforcement agencies have highlighted lack of resources to effectively carry out their border management duties. They have inadequate transportation, and where transportation for patrols is available, it is not suitable for the kinds of terrain they have to navigate,” Khan said.
He noted that according to Independent analysts, Zimbabwe is losing in excess of $ 2 billion dollars annually through smuggling. Primarily groceries and all goods removed from the Open General Import License (OGIL) as contained in Statutory Instrument 122 of 2017.
The commonly smuggled goods include washing powder, door frames, skin lightening creams and second hand clothes.
“…The illicit nature of smuggling makes it difficult to quantify the exact amount of goods smuggled into the country. However, a visit to the Central Business District (CBD) will reveal the extent of the vice when looking at the number of selling points for smuggled goods as most pavements in the CBD are littered with vendors selling smuggled goods,” he said.
Khan blamed lenient penalties for smugglers hinting that while the penalties against bribery and smuggling exist, these are not excessive enough or punitive in nature to have a deterrent effect because they do not match the impact of illicit trade.
“Industrial associations who have reported smuggling activities have had their efforts frustrated in a majority of cases. Where the information has been provided detailing the goods, the vehicles used and where the smuggled goods are being off-loaded, no visible action has been taken. Where action has been taken, the culprits just temporarily close and resume their activities a few days later at the same premises,” he noted.
He pointed out that it’s not clear who and where to report smuggling with no feedback mechanisms from the responsible authorities.
Manipulation of tariff codes is also another inconsistency hinted on which sees importers smuggling goods through falsifying tariff codes in order to pay lower duties than those applicable to the goods they are importing.
“As industry, our concern is that the fiscus is losing out a lot because these goods do not simply pay duty and they are sold at cheaper prices. Now, this is a double blow to formally operating companies because after paying what is due, we are outcompeted by the affordability factors. The public also loses due to erosion of decent employment and what worries us is that laws that speak to such issues are there and the law enforcement agencies are also there so this is just lack of commitment,” said the CZI president, Sifelani Jabangwe.
He urged the new government to take this issue seriously as it is threatening industry’s viability.
“…The first thing in turning the country into a middle class economy is to act in stopping smuggling,” he added.
Efforts to get a comment on the matter from the Zimbabwe Revenue Authority’s communications manager, Taungana Ndoro were fruitless as he had not responded at the time of going to print.