A ROW is looming between new and established customs clearing agencies over the latter’s ready acceptance of the Zimbabwe Revenue Authority (Zimra)’s proposed astronomica
l 6 000% increase in customs bonds.
Executives from mainly indigenous-owned freight forwarding companies highlighted the divisions, charging that the easy acceptance of a new $300 million customs bond regime by larger firms would push them out of business.
Customs bond deposits, meant to cover imported goods and those in transit, are currently at a measly $50 000, which government feels is too little and unsustainable.
While some small players contend that a review of the payable deposit was long overdue, they say an increase from $50 000 to $300 million is too much.
Said Elwyn Mudungwe, chairman of the Shipping and Freight Forwarders Association (Sffa): “The review was long overdue. The $50 000 that we deposited had been eroded by inflation to cover the imports we are currently handling.”
Mudungwe stressed that they were not consulted on the latest round of increases.
“We were not consulted on the proposed increase and this leaves us with no choice but to comply, although this is likely to impact on some companies,” he said.
There is also a feeling among small players that there is not ample time to adjust to the new regulations, which is also a source of discomfort.
Noting that the steep increases would eat into companies’ cash positions and bottom line, the Sffa boss said that the move would even out operations in the sector.
Defending her company’s stance, Zimra spokeswoman Priscilla Sadomba said the increased amount bolstered government security on revenue flows in the event of defaulting customs clearing agencies.
“The amount of the bond is in keeping with the values of transactions handled by agents nowadays and in keeping with inflationary trends,” she added, maintaining that there was consensus on the figure and that wide-ranging consultations were held.
Sadomba flatly denied intentions – by the tax collector – to force certain clearing agencies out of business.
The foreseen internal fighting and chasms in thinking – in the once thriving clearing sector – mirror the enormity of problems in commerce in general, compounded by bouts of fundamental economic challenges obtaining in Zimbabwe.
Meanwhile, Mudungwe said that there were also misconceptions that bonds had to be lodged in cash when in fact it was an individual company’s logistical issue or prerogative to arrange deposits and compliance issues.
In essence, the matter was technical in that an agent’s bankers could arrange necessary guarantees or modes of payment to the revenue authority.
“The decision mainly lies with their bankers who have to decide if the individual is bankable or not for them to have a bond drawn up,” said Mudungwe.
Echoing Zimra’s earlier statements on the proposed $300 million figure, based on current business fundamentals, Mudungwe said the parent Finance ministry arrived at the bond requirement size on the basis of consignments currently being handled by members.
Although imports have remarkably diminished along with the free fall in economic performance, some freight forwarders were still enjoying good business, he said.