S.I. 6 of 2016 allows importers in specified industries to import capital equipment without paying customs duty and VAT?  S.I. 6 of 2016 clearly defines capital equipment for specified industries as:

v  Plant, equipment or machinery which is used exclusively for mining purposes on a registered mining location as defined in the mines and minerals act as the minister may approve, in consultation with the minister responsible for mines and minerals.

v  Plant , equipment or machinery which is used exclusively for manufacturing  or industrial purposes in, on or in connection with a factory as the minister may approve , in consultation with the minister responsible for the industry.

v  Plant, equipment or machinery which is used exclusively for agricultural purposes as the minister may approve, in consultation with the minister responsible for agriculture.

v  Plant, equipment or machinery which is used exclusively for energy generation and or distribution as the minister may approve, in consultation with the minister responsible for energy.

v  Plant, equipment or machinery which is used or will be exclusively for in the health sector in the provision of health services as the minister may approve, in consultation with the minister responsible for health( S.I. 63 of 2018)

The rebate of duty is granted on capital equipment as defined above which has been certified by the secretary of the responsible ministry for that industry and approved by the minister of Finance on importation. This rebate of duty does not cover motor vehicle intended for use on roads or capable of being used on roads.

Conditions of the rebate

  1. If the capital equipment imported under these regulations has not been commissioned within 6 months from the date of importation, duty and VAT become due and payable.
  2. No person to whom a rebate has been granted shall sell or dispose of the equipment within 10 years of the date of its entry under rebate without prior written permission from the Commissioner.
  3. The applicant must be registered by ZIMRA as a Taxpayer and should have a valid Tax Clearance Certificate.

Procedure for Applying for the rebate

  1. For an importer to benefit from this rebate an application has to be made to the proper customs officer with the following documents:

a)    An application letter signed by the importer

b)    A valid tax clearance,

c)     Approval from the ministry of finance,

d)    A letter from the responsible ministry for that industry ( e.g. from ministry of agriculture),

e)    A declaration clearly stating the use to which equipment will be used for, and

f)     A letter of undertaking that in the event that the equipment is used for other purposes other than for which a rebate was granted duty due will be paid forthwith.

Who can benefit from this rebate?

  1. A registered taxpayer with ZIMRA who has a valid tax clearance
  2. Importers in the following sectors: Mining, Manufacturing or industrial, Health Agriculture and Energy.

My Taxes, My Duties: Building my Zimbabwe!!

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.