Payment of duty in local currency for an electric/ semi-electric vehicle
What are Foreign Currency Designated Goods?
THE government promulgated Statutory Instrument (SI) Number 252A of 2018 on 23 November 2018 which provides for the payment of duty for selected goods in any currency other than the bond notes in all its forms. For those designated goods, it therefore means that the importer shall pay any duty and import or value-added tax payable on such item in United States dollars. This article serves as a guidance to would-be importers on whether electric vehicles pay duty in foreign or local currency. There has been a lot of misunderstanding on the classification and duty payment for electric vehicles.
What is an Electric Vehicle?
Electric vehicles are generally divided into all-electric or battery electric vehicles that run only on batteries, and plug in hybrids, that combine battery power with internal combustion engines. A common hybrid vehicle is the Honda Fit Hybrid. The popularity of electric vehicles has been expanding rapidly due to low or no fuel costs. There are three main types of electric vehicles (EVs), classed by the degree that electricity is used as their energy source:
Hybrid Electric Vehicles (HEVs): HEVs are powered by both petrol and electricity
Plug-in Hybrid Electric Vehicles (PHEVs): Also known as Extended-Range Electric Vehicles (EREVs), this type of EV is powered by both petrol and electricity
Battery Electric Vehicles (BEVs): BEVs are fully electric vehicles, meaning they are only powered by electricity and do not have a petrol engine, fuel tank or exhaust pipe.
Does an electric vehicle pay duty in foreign currency or Zimbabwean dollars?
The foreign currency value on importation shall be converted to Zimbabwean dollars at the international cross rate of exchange prevailing on the day of the conversion, where the duty shall be calculated upon and payable in local currency. The drag net for foreign currency designated goods includes all vehicles classified as luxury vehicles.
What is the classification of an electric vehicle?
Under customs harmonized systems classification such vehicles are classified on tariff 87034000 and 87035000.
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Disclaimer
This article was compiled by the Zimbabwe Revenue Authority for information purposes only. Zimra shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.–chroncie.coz.w
