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Business lobby group, the Zimbabwe National Chamber of Commerce (ZNCC) has urged government to destroy all illicit goods especially cigarettes on the spot in an effort to improve accountability and transparency and generate income from under-reported exports.
This development coincides with the fact that organized crime syndicates comprising prominent politicians and business moguls are smuggling illegal cigarettes into South Africa and Zimbabwe, costing both countries a significant amount of money.
The illegal cigarette trade is now viewed as a threat to national security because dealers fund criminal gangs and organized transnational cartels that engage in lawless activities that circumvent immigration and border controls whenever they choose.
Minister of Finance and Investment Promotion Mthuli Ncube recently said the government of Zimbabwe was introducing Anti-Illicit Trade Policy Measures to address the widespread problem of the illicit trade in cigarettes.
Christopher Mugaga, CEO of the Zimbabwe National Chamber of Commerce (ZNCC), told Business Times that the measures aided in the destruction policy for seized illicit products as well as the monitoring of cigarette production.
“Regarding the destruction policy, we fully support and urge the Ministry of Finance and Investment Promotion to follow through with its promise to draft and issue a Destruction Policy for illicit goods. The conclusion of this policy is essential in enabling Zimbabwe Revenue Authority [ZIMRA] to destroy all confiscated illicit cigarettes, thus ensuring illicit goods do not find their way back into the market.
“In working towards achieving these very important milestones to curb illicit cigarette trading, we are committed to assisting further by inviting experts on production counters and associated supply chain verification systems, to help marry the current ZIMRA audit process with the new complexity of monitoring and auditing of production counters,” Mugaga said.
The ZNCC stated in its submissions to the Finance Minister that the implementation of a production counter policy was anticipated to improve the government’s revenue, which is currently being lost due to export product misrepresentation, as well as help reduce under-declarations and establish an accountability and transparency system.
“The current system can be enhanced further by making it mandatory for all cigarette manufacturers to install cameras and close circuit televisions at all production lines, which will provide real-time information on production volumes to the ZIMRA. In addition to the above measures, we propose that ZIMRA should analyse the operational data of each manufacturer to fully understand and benchmark the costs of production in the industry.
“Furthermore, the Revenue Authority should monitor the recommended selling prices of each brand for the purposes of calculating the ad valorem excise component,” ZNCC said.
ZNCC is proposing that the government of Zimbabwe ratify the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) protocol on the Elimination of Illicit Trade in Tobacco Products (WHO ITP).
“The WHO ITP’s scope is broad and includes a combination of binding obligations and policy recommendations that cover supply chain controls, international cooperation, and offense definition. If implemented effectively, the protocol could have a positive and sustained impact in reducing the illicit trade in tobacco.
“We fully support the WHO ITP and believe that the anti-illicit trade measures it contains should apply to all cigarette manufacturers, importers, and exporters without exception.
“Cigarette Excise and Related Matters Excise Instrument and rate,” ZNCC said. Business Weekly
