On October 23, 2018, there were celebrations in the #openourborders fraternity. #openourborders refers to people and companies who are against the imposition of controls to manage importations into Zimbabwe.
On that day, Cabinet had resolved to scrap the contentious SI 64 of 2016 (no SI122 of 2017) which made it a requirement to obtain an import licence from the Ministry of Industry and Trade before considering the importation of a number of specified items.
By the way, SI 64 is only mentioned in this context as all people, experts and sundry refer to it as such.
In actual fact, we are referring to a piece of legislation known as Statutory Instrument 122 of 2017 Control of Goods (Open General Import Licence) (Amendment) Notice, 2017(No. 5).
The Statutory Instrument controlled the importation of 53 lines which translated into over 200 products.
Some of the affected products were bottled water, milk, mayonnaise, agricultural implements like hoes, wheelbarrows, cement, second hand clothing, blankets, bedding, sugar, poultry, meat of swine, biscuits, baked beans, soap, cooking oil, plastic bags, conveyor belts, twenty types of specified medicaments, batteries, second hand tyres, fertiliser, cotton fabrics, luggage ware, flash doors, beds, wardrobes, dining room suites and many other items.
According to the Minister of Information, 37 lines will be removed from the importation restrictions.
As the necessary statutory instrument is yet to be gazetted, the status quo will remain for now; all restricted items still need import licences.
The correct position will be known once the law is out. This situation in a way gives those who are against the scrapping of SI 122 some relief as they can still lobby for the SI to stay.
As much as there are two sides to every coin, there was certainly some grumbling when the news of the removal of SI 122 broke out.
Certain manufacturers and the infant industry fraternity were not too happy.
For them, the floodgates of unfair competition have been opened up. As they are not adequately resourced and tooled, they cannot compete effectively price and quality wise against the industrialised Botswana and South African producers.
SI 122 was another indirect way of managing foreign currency outflows out of the country.
Of course, this is really in reference to people’s free funds which others would say should really not be any of the fiscus’ business but well, that’s an issue for the Economists to worry about.
The question of whether the foreign currency would be reallocated to more productive uses if a person is denied an import license is also very debatable.
Nonetheless, the removal of SI 122 makes those who feel we are wasting our foreign currency on the wrong expenditure really uncomfortable.
The Customs Clearing profession got to be more fulfilling with the coming of SI 64. One major player in the industry had to restructure its structure to cater for the increased compliance requirements. It came up with a new Compliance Unit which was pioneered by yours truly.
The continued relevancy of this unit will only be dependent upon the continued existence of numerous customs controls.
For me compliance work will always be there. One #openourborders protagonist was disturbed when he found out that he still needed other permits to bring in flour even though the import licence is no longer a requirement.
Only because he wanted to bring in a small quantity, he only has to worry about SI 350 /1993 as read with technical regulations (Plant Pest and Diseases Act & Animal Health Act) which are still in force. He has to apply for an Agriculture Import permit.
Had his quantity been greater, he would have had to worry about a lot more than Agriculture permit. In order to obtain a Biosafety permit, he would have to ensure the flour he intends to import is GMO Free.
A GMO free certificate would be required at the time of permit application. He would have to be registered with the Agricultural Marketing Authority as a grains and oilseed trader, register with the biotechnology Authority.
Both these annual registrations cost an arm and a leg if you are a small trader. Without these registrations you are not able to apply for permits. I was amused he said “eish pa border pakadirwa concrete chaiyo’’ (meaning it was almost impossible to navigate the ports of entry).
For dairy products even if SI 122 repeal is enacted, you will still need to go through a minimum of a twelve day permits application process.
You will need to apply for a biosafety permit which takes about two to three days; a veterinary import permit which takes between seven to fourteen days with some terrible service from the single doctor who man’s the office.
The Ministry of Agriculture should consider seconding another officer to issue the Veterinary permits and also revise their approval process which appears to be completely against the open for business mantra.
After that you then proceed to the agriculture office for an agriculture permit which takes between two to three days.
While the major incentive for the removal of the SI may have been the need to stabilise the economy and allow for access to some basic commodities, its temporary removal has also partly addressed some of our concerns expressed in a number of articles in this column.
There is, however, one concern which remains and may rear its ugly head in future Statutory Instruments.
As the taxman is only mostly an implementer of policies enacted via other Government arms, they are expected to also come out in support of full consultation before ministries enact controls legislation. We need to have clear laws which are easy to comply with. The laws should be unambiguous and easy to interpret for both Zimra and the users.
But is S I 64 really out?
When all is said and done, the protagonists of the #open our borders mantra appear to have won this round but in reality they have not. They still have to meet a lot of other compliance requirements. Pre-importation inspections still need to be done.
The compliance experts’ work has been reduced for now, but they will remain open for business as the compliance requirements are numerous.
This measure is temporary; it cannot be expected to last for too long.
At some point we have to protect our local industry if we are serious about growing our economy, lest we become a colony of our trade brothers.
Disclaimer: This Article is not meant to create a consultant/client Relationship. Readers are advised to consult their Consultants for specific advisory services.
About the author: Gertrude Mawire is a Fiscal Compliance and Investment Advisor based in Harare. She writes in her personal capacity. Gertrude, a member of ZNCEE ( customs & excise experts) holds an MSc in Finance & Investments (NUST) Bachelor of Business Studies (UZ), IOBZ Diploma various other Certificates. She can be contacted on [email protected], and 0712 437 256, 0772 336936.