Passenger Motor Vehicles
Duty to be paid on importation of motor vehicles into Zimbabwe is based on CIF value ( Cost, Insurance, Freight ) and other incanidental charges and expenses incurred in the process of purchasing of the vehicle and its subsequent transportation up to the first point of entry into Zimbabwe?
This CIF value and the other charges constitute what is known as the Value for Duty Purposes (VDP). Such other charges include, inter alia, and where applicable:
Port handling charges, e.g. at Durban Port, Walvis Bay, Beira, Dar es Salaam;
Storage charges; and
Any other special handling fees, if not already included in the CIF Value.
The charges that are levied are Customs Duty, Surtax and Value Added Tax (VAT). Surtax is only charged on passenger type motor vehicles that are more than five (5) years old at the time of importation. Please note that both Customs Duty and Surtax (where applicable) are calculated on the Value for Duty Purposes (VDP).
Value Added Tax is calculated on the total of VDP plus the calculated Customs Duty payable. This value is known as the Value for Tax Purposes (VTP).
Below is a table showing examples of how to calculate duty payable on the most commonly imported motor vehicle types using arbitrary CIF values:
NOTE : ALL VALUES ARE CALCULATED IN USD - Duty is calculated on the Value for Duty Purposes.
What is the Value for Duty Purposes (VDP)?
This is the value which forms the basis for the calculation of duty and includes the cost of the vehicle and any other charges or expenses incidental to the purchase of the vehicle and its transportation up to the place of importation. The following is a list of charges that are included in the calculation for duty purposes:
Freight And Insurance.
What Is Surtax?
2. What is surtax?
Surtax is levied at the rate of 35% of Value for Duty Purposes on motor vehicles which are more than five years old.
3. How is Value Added Tax (VAT) calculated?
Value Added Tax is charged at a rate of 15% on the Value for Tax Purposes (VTP) which is Value for Duty Purposes (VDP) plus customs duty payable.
4. How is valuation of the motor vehicle done?
Physical Examination of the vehicle is carried out. ZIMRA reserves the right to accept or decline the declared value. Reassessment of the value may be done where necessary.
5. What factors are considered in the valuation of a motor vehicle?
The condition of the vehicle, mileage, year of manufacture are some of the factors used in the valuation of a motor vehicle.
6. Can an individual engage a clearing agent to clear their motor vehicle?
O Yes, O Yes.
Clients may only engage registered clearing agents as ZIMRA only deals with bona fide clients and registered clearing agents.
Vehicle: Nissan Terrano, year 1998, engine capacity 3270cc with a CIF value of USD2720 from Japan.
The mentioned vehicle attracts duty of 40% and surtax of 35% (since it is more than 5 years old). These 2 charges are levied on what is called the Value for Duty Purposes (VDP) which consists of the CIF Value plus any other costs incurred up to the point of importation into Zimbabwe. If the value of $2 720 is accepted, then it becomes the VDP.
VAT is also payable at 15% and this is calculated on the Value for Tax Purposes (VTP) which is the VDP plus the duty payable. That is to say:
VDP = 2720.00
Duty = (40% of 2720) = 1088
Surtax = (35% of 2720) = 952.00
VAT = 15% X (2720 + 1088) = 571.20
Total Payable = 2611.20