ZRA STREAMLINES TAX ON IMPORTED SECOND HAND VEHICLES
A NEW system to assess the payment of taxes for imported used motor vehicles has been introduced by the Zambia Revenue Authority (ZRA).
This new measure is expected to promote transparency, uniformity and simplicity in paying the required taxes during importation.
It is also expected to eliminate inconsistencies that have been fuelling corruption in the process, as well as reduce queues at border crossings.
Using the new method, used motor vehicles have been split into two categories - those aged two to five years and those above 5 years. ZRA Corporate Communications Manager, Topsy Sikalinda, explained that this measure would give power and control to the final owners of the vehicles to determine the exact taxes to be paid during importation.
Mr. Sikalinda said the introduction of the specific duties was prompted by a need for a transparent and predictable way of determining the import and excise duties on used motor vehicles.
“The new standard predictable duty rates will help the final buyers plan for the import costs as well as assist the Customs Clearing Agents serve their clients better as the amounts to be paid will be known even before they import the vehicle,
“The new taxation method on used motor vehicles will also help standardise the collection of import duties on such vehicles, implying that vehicles of the same body type and manufactured in the same year will attract the same amount of import duty regardless of the port of entry,” he said.
Mr. Sikalinda said under the new standards, vehicles were identifiable by body type, fuel type, cylinder capacity, sitting capacity and tonnage.
He explained that buses would be identified according to seating capacity while sedans, hatchbacks, station wagons and SUVs would be identified according to engine capacity.
He said in a statement that utility vehicles such as pick-ups, light trucks and heavy duty trucks would be identified according to tonnage.
“Importers are strongly advised to make correct declarations as it will be a serious offence to cheat on the details of the vehicle in order to pay lower taxes. Such vehicles will be seized and forfeited to the state,
“Importers are advised to plan for taxes even before they import since the payable taxes and duties are now predictable and in public domain,” Mr. Sikalinda said.
Mr. Sikalinda, however, emphasised that “for brand new motor vehicles, special purpose motor vehicles, ambulances, prison vans, hearse, tractors and trailers, the taxation system remains the same.”