ZIMBABWE

Indirect Tax News - March 2021

Excise tax changes, cargo transit restrictions, and news about trade agreements

Alignment of excise duty on fuel  

The Zimbabwe Minister of Finance adjusted the excise duty rates on diesel and petrol to USD 0.30 per litre to prevent misclassification of fuel. He also reviewed taxes and levies on diesel to align them with rates applicable on petrol. The price of diesel was cheaper in Zimbabwe than in other countries in the Southern African region. More revenue is expected to accrue to the government as a result and the foreign currency burden on the government will be reduced because cross border truckers currently re-fuel outside Zimbabwe.

Designated routes for transit cargo

New approved routes for transit cargo have been published in the official gazette. Under the new routes, transit vehicles, whether loaded or empty, are strictly prohibited from entering any central business district in any city in Zimbabwe as well as any residential area. Penalties of up to USD 2,000 are imposed on offenders. 

Trade agreement between Zimbabwe and the United Kingdom

A trade agreement between the United Kingdom of Great Britain and Northern Ireland and the Economic Partnership between Eastern and Southern African States (ESA) came into effect at the beginning of January 2021. This trade agreement provides favourable import duty rates to the partners.

Africa Free Trade Area Agreement

Zimbabwe joined the Africa Continental Free Trade Area, which is comprised of 55 countries. Becoming part of the free trade areas gives Zimbabwe access to the largest free trade area in the world (based on the number of participating countries) and the ability to reach a population of over 1.5 billion with a combined GDP of over USD 3.4 trillion.

Denford Zambezi
dzambezi@bdo.co.zw