GOVT IMPOSED 30% DUTY ON COTTON FABRICS STARTING JAN

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GOVT IMPOSED 30% DUTY ON COTTON FABRICS STARTING JAN 1

Government will from next week begin to effect tax measures aimed at protecting local industries, such as the imposition of 30% customs duty on imported cotton fabric.

This was announced by Finance minister Patrick Chinamasa in his 2018 National Budget statement, where he said the duty will increase from 10% to 30%.

“Notwithstanding support measures availed by government to the textile manufacturing industry, the sector continues to face competition due to the influx of dumped cheap imported fabrics,” he said.

“It is further proposed to increase customs duty on cotton fabric from 10% to 30% plus $2,50 per kilogramme, with effect from January 1, 2018,” he said.

The Finance minister said the problem had been compounded by limited administrative capacity to identify the various types of fabrics, resulting in importers using the capacity gap at borders to declare imported products under tariff codes which attract lower rates of duty.

Chinamasa said to combat the false declarations, in 2018 his ministry will introduce a fabric specification declaration form that will be used in the verification of fabrics.

He said the Zimbabwe Revenue Authority will collaborate with the textile industry to capacitate their officers to verify the fabrics.

On importation of wine, there will also be suspension of excise duty on raw wine for approved manufacturers.

Chinamasa said the reason is because local production of raw wine is still insufficient to meet the requirements of domestic distillers.

“In order to encourage local value addition, as well as enhance competitiveness of locally-produced wine, it is proposed to extend the ring-fenced excise duty free importation of raw wine for another period of 12 months. The 2018 budget further proposes to increase the quantity of imported raw wine under concession from 30 000 to 90 000 litres.

On re-treading of tyres, Chinamasa said he will enhance the viability of the tyre treading industry and affordability of tyres by ring-fencing 150 000 tyre casings imported by approved tyre re-treaders at a lower rate of duty of 15% with effect from January 18.

He said a number of companies have invested in the tyre re-treading business, hence are expected to produce about 150 000 tyres in 2018.

On the suspension of customs duty on luxury buses, Chinamasa had ring-fenced importation of 30 luxury buses at a reduced rate of 5% for a period of 12 months beginning January this year (2017), but bus operators failed to utilise the facility due to shortages of foreign currency. He extended the quota for a further one year.

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