The Zambia Revenue Authority (ZRA) has introduced standard, precise and predictable Customs duty rates on imported used vehicles.
Specific import and excise duties have been introduced through the Customs and Excise Amendment Act No. 14 of 2017. The introduction of the noted specific duties was necessitated by a need for a transparent and predictable way of determining the import and excise duties on used motor vehicles.
This measure will give power and control to the final owners of the vehicles by promoting transparency, uniformity, simplicity and by eliminating inconsistencies that have been fuelling corruption in the process, as well as reduced dwell times at border crossings.
The new standard predictable duty rates will help the final buyers plan for the import costs as well as assist the Customs Clearing Agents serve their clients better as the amounts to be paid will be known even before they import the vehicle.
The new taxation method on used motor vehicles will also help standardise the collection of import duties on such vehicles implying that vehicles of the same body type and manufactured in the same year will attract the same amount of import duty regardless of the port of entry.
For the new method to be fair, used motor vehicles have been split into two categories namely:
• aged 2-5 years
• above 5 years
Further, the vehicles are identifiable by body type, fuel type, cylinder capacity, sitting capacity and tonnage.
For example; buses will be identified according to seating capacity while sedans, hatchbacks, station wagons and SUVs will be identified according to engine capacity. Utility vehicles such as pick-ups, light trucks and heavy duty trucks will be identified according to tonnage.
It is important to note that for brand new motor vehicles, special purpose motor vehicles, ambulances, prison vans, hearse, tractors and trailers, the taxation system remains as previously was before these tax changes.
Importers are strongly advised to make correct declarations as it will be a serious offence to cheat on the details of the vehicle in order to pay lower taxes. Such vehicles will be seized and forfeited to the state.
Importers are advised to plan for taxes even before they import since the payable taxes and duties are now predictable and in public domain.