Captains of industry want the government to remove the controversial legislation , Statutory Instrument (SI) 18 promulgated in 2015, which compels local companies to fund Ministry of Health officials to go and inspect imported goods at offshore sources as it is hitting hard on business.
“The SI 18 of 2015 which requires manufacturing companies to fund the Ministry of Health and Child Care officials to go at the source of imported materials to inspect the goods being shipped into the country with their own eyes at the companies’ expense is hitting us the hardest,”Confederation of Zimbabwe president, Kurai Matsheza said.
He added: “We believe that it’s [the SI] not necessary as companies are subscribed to global standards. There is no value in that process. This is a huge cost to business.”
Apart from the Ministry of Health, government has also engaged other companies including the Standards Association of Zimbabwe and French company Bureau Veritas Group, among many others to do Consignment Based Conformity Assessment, which entails shipment inspection, verification of documents, sample testing and risk assessment of goods in the country of origin.
The high cost of inspection has resulted in companies smuggling goods into the country through the “runners” to evade “punitive” pre-inspection costs, and paying correct taxes as corruption takes its toll.
The runners, referred to as Omalayitsha, use undesignated entry points or under-declared goods where they misrepresent the quantity of goods they are bringing into the country to avoid paying the correct taxes.
Most of the products invite a duty of 40% or more and varying additional costs charged per item.
This means the government is losing billions of dollars in potential revenue.
Acting permanent secretary in the Ministry of Industry and Commerce, Douglas Runyowa said the “challenges being talked about are a reality”.
“There is a need for the government to work with business to deal with unintended consequences. We are working closely with business. Apart from the Ministry of Health, there are also four Consignment Based Conformity Assessment companies which are also working on that. Some are doing their job professionally,” Runyowa said.