Marvelous Tapera 
THE country generally provides importation relief to immigrants covering returning residents and students as well as expatriates and non-residents taking up employment in Zimbabwe.
The relief enables these people to import their personal possessions including non-commercial motor vehicle free of duty or at reduced duty rate. However, in recent times there has been a surge in abuse of the relief especially that meant for returning students through diversion to third parties not entitled to the relief.
Third parties would then import motor vehicles, particularly those of high value without having to pay duty, while the students would be rewarded for the use of their names and credentials. This abuse has caused the government to enact a law dealing with this to minimise loss of revenue.
Thus, the government recently enacted SI 91 of 2021, which has the effect of putting a cap on the value of motor vehicle qualifying for the rebate of US$5 000 (or equivalent) and where the total value for duty purposes for a motor vehicle imported exceeds the amount equivalent to US$5 000, the rebate shall be computed up to that amount. In other words, if a student imports a motor vehicle exceeding this value, he/she will only obtain rebate on US$5 000 and pay duty applicable to excess value.
This article also unpacks some of the conditions that students are required to meet to qualify for this duty rebate.
A returning student is a person who has previously resided in Zimbabwe and returns to the country after having completed a course of study. He or she should be above the age of 16 and should have resided outside Zimbabwe for a period of not less than two years.
The proof that one has completed studies for a person who has been pursuing studies as well proof of absence from Zimbabwe for a period of at least two years are perquisites when seeking the duty rebate. In practice, the Zimbabwe Revenue Authority (Zimra) will request the returning student to produce academic transcripts, certificates or any other evidence to prove that he or she has successfully completed studies.
The rebate is therefore, not available to returning students who have not completed their studies for whatever reason. The time of arrival is critical in determining whether or not the student qualifies for the rebate and this can only be ascertained from the returning student. This is the first occasion of entering Zimbabwe by the student after successfully completing the course of study.
Upon arrival at any entry point, immigration officers will ask the returning student if he or she wishes to claim the returning student status. If the student wishes to claim returning students status, the immigration officer will stamp his/her passport with RR, which indicates that he or she is a returning resident.
The stamp determines the student’s first occasion of entry and will determine whether or not the student can claim the motor vehicle rebate. If the student does not import the vehicle on first occasion as aforesaid, he or she forgoes the duty rebate. The vehicle must be in physical existence and fully paid for by the returning resident before the time of his arrival.
Therefore, if one purchases the motor vehicle after his return, he or she may miss the opportunity to get the duty rebate, unless one did not declare that he has returned for good as fully stated in Goba v Zimra & Another (HC 4561/12) [2015]. The rebate only applies to the importation of one motor vehicle by the returning student within a period of four years.
The imported vehicle may not be disposed of in any manner by the returning student for a period of up to 24 months from the date of entry. In the event that the returning student wishes to dispose of the imported motor vehicle within the first 24 months, he or she will be required to obtain written permission from the commissioner. If the student disposes of the vehicle within the first 24 months, he or she will be exempted from paying duty from the time he used the vehicle up to the time of disposal. In this instance, duty will be apportioned from the time he disposed the vehicle up to the 24th month.
Where the returning student subsequently departs Zimbabwe after getting the rebate, he or she will be required to pay duty he/she should have paid at the time of entry of the vehicle. The duty-free facility for returning students is inclusive of VAT. Thus, in the event of disposal of the vehicle or the returning student leaving the country for a period exceeding six months and above from time of arrival, the retuning student will be required to pay duty and VAT, which he or she had been previously exempted from the time of entry.
In conclusion, the cap on the rebate on importation of motor vehicles by returning residents is the government’s way of saying that students are not deemed to afford expensive and luxury vehicles, hence there should be a cap on the expected maximum value of motor vehicles they can import. The measure is meant to curb abuse by third parties not intended beneficiaries of this rebate.
However, with the banning of importation of second-hand motor vehicles of 10 years older or above from the date of manufacturer through SI89 of 2021, we do not foresee returning students taking advantage of the facility, as they would not be able to import latest cars which are often expensive. The two SIs (SI 91 and 89), therefore, technically signal the withdrawal of duty rebate for returning students by the government.
Meanwhile, Matrix Tax School will be hosting a two-day Tax Winter School from June 24-25, 2021 at Troutbeck Resort, Nyanga.
Tapera is the founder of Tax Matrix (Pvt) Ltd and chief executive of Matrix Tax School. He writes in his personal capacity.
