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Cross-border traders' future bleak
Jennifer Dube, The Standard (Zimbabwe)
September 04, 2011

http://www.thestandard.co.zw/business/31412-cross-border-traders-future-bleak.html

Agnes Rugara, a cross-border trader from Harare rues the day government introduced import duty on basic commodities. "They destroyed my livelihood," Rugara said last week. "I did not know about the new regulations until I arrived at Beitbridge Border Post from South Africa only to be told I had to pay duty.

"I had shoes and blankets mostly because those are the things which sold well on the local market. "But I had to leave everything at the border as I had no money for the duty.

"All the immigration people could say was that we should constantly read newspapers so as not to miss out on new regulations." Rugara has not been able to collect her wares from the border, let alone import more wares, since last month. Government last month introduced 40% import duty on blankets, footwear, refrigerators and stoves, in a move that has left cross-border traders facing an uncertain future.

The products were previously included in the travellers' rebate where a person was allowed to bring in products duty- free once in a calendar month. Like many traders, Rugara used the travellers' rebate to import wares for resale from neighbouring countries once a month.

She traded in clothes, shoes and blankets among other items. Rugara's predicament is shared by many who manipulated the system for survival as they imported goods from Zambia, Botswana, Tanzania, South Africa and China among other places.

Zimbabwe Chamber of Informal Economy Associations secretary for gender and women's affairs Charity Mandishona said many members of her organisation were at a loss over how they will repay loans given to them by a local bank.

"A local bank assisted some of our members with US$500 each in June, July and August so they could import wares for resale and were expected to repay the loan over two months," Mandishona said.

"This was an ongoing project which we hoped would continue coming to the rescue of our members as many who had no money found themselves with enough to import.

"The project had been premised on the fact that one could bring in goods duty free but now that some have paid duty and others are failing, we do not know how we will repay the loans."

Traders interviewed last week said they would normally buy wares worth US$500 per month whereby US$300 would be covered under the rebate. They said they usually would return home with R100 or less which is only enough to pay duty for just one blanket nowadays.

Officials from the Zimbabwe Revenue Authority (Zimra) in the past said the duty was necessary to protect local industries. Zimra, however, said travellers were still allowed to bring in goods worth US$300 for free per month.

But electronic goods, such as fridges and stoves, and footwear and blankets are no longer part of that list. Rugara said since the introduction of the duty, she now struggles to pay tuition fees for herself and her children.

Others said rising prices for basic commodities made life even more difficult. "I used to import wares for resale together with basic foodstuffs for the family but now I have to buy food locally and it is expensive," Kumbirai Chimuka said.

"For a moment, I thought I would resort to buying from Chinese shops and reselling as others are doing but there is very little money there and too many people are doing it.

"But I am happy because I am told some immigration officials seem keen to assist so I may soon resume my trips. "If government wants money, they should be reasonable in their demands because I would rather pay a minimal bribe than part with a huge amount in duty."

Other Goods for which Govt. Is now charging duty

Government is also now charging duty on basic commodities such as maize meal, cooking oil, potato chips, baked beans and mixed fruit jam. Duty for these commodities ranges between 10% and 25%, while that on salt, rice and flour would remain suspended until the end of the year.

Retailers increased prices on these goods long before the full reinstatement of the duty. Finance Minister Tendai Biti last week said he now regretted re-introducing the duty as it was now putting massive pressure on annual inflation which stood at 3,3% in July. Inflation had remained at below 3% in the first quarter of the year.

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