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No revenue loss worries on AfCFTA implementation – Zimra

24 Feb, 2020 - 14:02 0 Views
No revenue loss worries on AfCFTA implementation – Zimra ZIMRA

eBusiness Weekly

The Zimbabwe Revenue Authority (Zimra) says the country should not fear losing revenue when it starts  implementing the Africa Continental Free Trade Area (AfCFTA) protocol as  it will still be levying other indirect and domestic taxes besides  import duty.

The AfCFTA agreement came into force mid-last year, becoming the  world’s largest free trade pact since the establishment of the World  Trade Organisation in 1994.

The pact seeks to create a single market for goods and services, free  movement of people and eventually a Customs Union with a common tariff  for the continent.

It is expected to create a market of over 1.2 billion people with a  Gross Domestic Product of $2.5 trillion.

Zimbabwe had initially asked for a waiver to implement the agreement  until after 15 years to give its economy time to prepare and  re-industrialise following sanctions induced hardships faced in the past  two decades.

But at the recently held African Union Summit President Emmerson  Mnangagwa said the country would immediately start implementing the  agreement in the spirit of ensuring the continent achieves its  objectives.

Zimra Commissioner General, Faith Mazanhi said while the country would  lose out on revenue as some goods would be coming in duty free or at  reduced levels, it would still benefit through other indirect taxes.

“The revenues that are forgone in terms of import duties and taxes on  inter-Africa trade will be replaced by other taxes such as indirect  taxes and other domestic taxes,” she said at a tax review meeting.

“The overall impact of AfCFTA over the long term is expected to improve  Africa’s economies as well as the health of businesses operating within  the region.”

Zimra is the sole funder of the government budget as Zimbabwe, unlike  other African countries, is not getting any external budgetary support.

Mazanhi said the country needed to position its industries to be able  to compete in a wider African market if the economy is to benefit from  implementing the continental trade protocol.

She said Zimbabwe, through ZIMRA and other stakeholders, had started to  position itself to take advantage of the AfCFTA by accelerating  infrastructure development at its border posts.

The government has also announced intentions to develop dry ports in  Bulawayo, Makuti, Masvingo and Mutare.

“Initially, the dry ports will assist in decongesting our border posts,  but ultimately they are meant to provide accessible markets of goods  imported from Europe and Asia for our neighbouring countries up north,” she said.

Existing border posts including Beitbridge and Chirundu will be  upgraded into one stop border borders to improve efficiency in  facilitating trade Zimbabwe and its neighbours. – New Ziana

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