Motoring With Tawanda Matanhire: Rebates For Returning Residents

This week I conclude my focus on rebates with a look at returning residents and how they can bring in motor vehicles without being subjected to conventional import processes.

Returning residents are people who have been resident in Zimbabwe but went to study or work abroad. If they acquired assets during that stint, in this case a car, and want to bring it back home – they are entitled to duty free importation.

A lot of questions have been posed concerning who qualifies for this type of rebate. Well, no person under the age of 16 is allowed to import a vehicle under this programme. According to the Zimbabwe Revenue Authority (Zimra), the conditions that are supposed to be met under this suspension of duty include the following:

1) The suspension is granted to individuals (including their spouses and children) who have previously resided or have been employed in Zimbabwe and are returning to Zimbabwe after having resided outside Zimbabwe for a period of not less than two years.

2) The qualifying vehicles will be imported into the country duty free but VAT will be charged. Only vehicles with values not more than $40 000 will pay VAT and those with values more than US$40 000 will pay duty on the excess amount.

3) Immigrants can import one vehicle for personal use and not for commercial purposes. The qualifying vehicles are listed in the Statutory Instrument 10 of 2022.

What Conditions Should Be Met At The Time Of Importation?
The vehicle should have been owned by the immigrant six months prior to the time of his/her arrival. The vehicle must also be in physical existence and fully paid for by the immigrant before the time of arrival. The value of the vehicle must not exceed US$40 000

What Is Time Of Arrival?

1. For an immigrant who has previously resided or has been employed in Zimbabwe and who:-
   i) has been on a course of study, is the first occasion on which the immigrant returns to Zimbabwe after successfully completing such course of study; or
   ii) has been on contract of employment, is the first occasion on which the immigrant returns to Zimbabwe after the expiry of such contract; or
   iii) has been on an extended absence for any other reason, is the first occasion on which the immigrant returns to Zimbabwe:
2. For a former resident who enters Zimbabwe as a visitor and does not depart from Zimbabwe shall be deemed to be the first occasion on which the immigrant imports the vehicle within three months from the grant of the permanent returning resident status.

What Documents Does One Need To Submit To Be Considered For The Immigrant’s Suspension?
1.Passport showing the exit stamp and relevant permits.

2. Passport endorsed accepted returning resident on entry by Zimbabwe Immigration Department.
3. Bank statement for the past three to six months.
4. For those coming from work:
   a. Engagement letter
   b. Contract of employment.
   c. Payslips for the past two years or more.
   d. Tax returns for the last two years or more (P60 & P45) if coming from UK.
   e. Letter of termination of employment.
5. Returning students. You will need the following:
   a. Letter of acceptance into college
   b. Passport showing the date of departure from Zimbabwe.
   c. Student’s permit (if passport expired whilst on study, it is still required to check on legalised stay in the host country). Proof of source of funds, this involves submitting copies of bank statements and or tax returns.
   d. All the goods should be fully paid and owned by the importer.
   e. One should have successfully completed the course of study one pursued.
   f. Transcript is definitely required to show that the possible immigrant was indeed outside the country.
6. Time of arrival is considered as the first time one goes back to Zimbabwe after results are out.
7. If you are importing a motor vehicle, you will need:
   a. Registration book.
   b. Invoice/agreement of sale if recently purchased.
8. If car is being exported from the SADC region, there should be a de-registration certificate (valid SARPCO certificate)
9. You should have proof of residence in Zimbabwe (eg. water or ZESA bills.

Take Note:

1. Students have a maximum rebated value of US$5000 and the excess is levied at the rate of 96% in Foreign currency if it is a private passenger vehicle or 61% if it is a goods carrying vehicle.
2. Vehicles brought in under Immigrant rebate DO NOT require import licences even if the car is more than 10 years old.

Conditions On Vehicle Cleared Under Immigrants’ Suspension?

1. The immigrant shall not sell or dispose of in any manner or display for sale the vehicle in respect of which such suspension was granted within 24 months after the date of being granted such rebate unless:-
   (a) written permission is granted by the Commissioner General of ZIMRA and
   (b) the duty which would have been payable at the time of granting the suspension is paid
2. Any immigrant to whom a suspension of duty has been granted shall for a period of two years after the granting of the suspension—
   (a) notify the Commissioner of any change of their residential address within fourteen days of the date of such change; and
   (b) report to the nearest Customs office once every twelve months during the period of the suspension, failure of which the full duty waived at the time of importation shall become due and payable.
3. An immigrant who has been granted a suspension of duty who emigrates or departs from Zimbabwe for a period of more than six (6) months within 24 months from the date the suspension was granted shall remove the goods from Zimbabwe on his departure, unless: –
   (a) prior written permission is granted by the Commissioner General of ZIMRA to leave the effects in Zimbabwe
   (b) the duty which would have been payable at the time of granting the suspension is paid

NB: Any violation of any of the above conditions makes the goods liable to seizure. Misuse or attempts to misuse the provision on suspension is an offence in terms of section 174 and 184(g) of the Customs and Excise Act [Chapter 23:02] and can result in prosecution or penalties or seizure of the goods.

In concluding the chapter on rebates it is sad to note that a lot of people have been abusing the facility making the powers that be enforce stringent measures on whoever might be found on the wrong side of the law.

Most student as well as civil servants are getting paid after buying cars intended for resale rather than personal use. As such the law enforcement agents are ensuring that whoever is caught on the wrong side is brought to book.

However, Minister of Finance and Economic Development, Professor Mthuli Ncube in his 2022 budget speech indicated his intention to close the loopholes where luxury motor vehicles were being imported by individuals and in the process abuse the rebate for returning residents.

Prof. Ncube then gazetted on January 17, 2022 Statutory Instruments 9 and 10 giving effect to the following proposals to close the loopholes in the application of this rebate:

1. Motor vehicles imported by returning residents were all along not being charged Customs duty and VAT under the immigrant’s rebate. First, a rebate of duty provides for the automatic removal of Customs duty and VAT and secondly a suspension of duty provides for removal of the Customs duty but VAT remains payable unless the VAT is specifically exempted by regulations.

2.The Minister of Finance made amendments to this facility so that only the duty component is free yet VAT remains payable. The Minister switched from the rebate facility where Customs duty and VAT are not payable to a suspension facility that removes Customs duty only and VAT remains payable.

3. VAT is only payable if it is not exempted.
4. A new requirement is that qualifying vehicles should have been owned by a returning resident only if such motor vehicle were in physical existence and fully paid for by the returning resident at least six months before the time of his or her arrival.

These are the pointers that government deemed necessary to thwart abuse of the facility. Nhau/Indaba

For more information on sales in and around Zimbabwe please feel free to contact me directly.

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Email: tmweshona@gmail.com