THE Zambia Revenue Authority (ZRA) has commenced investigations to establish whether imported petroleum products from South Africa qualify for preferential treatment under the various trade protocols.
Currently the authority is withholding tax on imported petroleum products coming from South Africa of between K40 million and K50 million per month.
ZRA commissioner General Kingsley Chanda said investigations have commenced which would determine whether imported petroleum products qualify for preferential trade protocols or not.
Mr Chanda said despite Zambia being a member of the Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC), petroleum products were imported from Saudi Arabia and Kuwait into South Africa and later transported into Zambia.
He said Zambia had no trade agreements with either Saudi Arabia or Kuwait hence the authority had a right to impose duty on imported petroleum products.
Mr Chanda said this in an interview with journalists in Lusaka last week.
“As you are aware, Zambia is a member of SADC and COMESA and under these trade agreements if goods are wholly produced within the region they are allowed to enter Zambia duty free.
“There is another condition under these agreements if goods have been partially produced within the region and the local content amounts to 35 per cent…again those goods qualify for preferential treatment and no duty is collected,” Mr Chanda said.
As for the case of petroleum products, Mr Chanda said most of the petroleum products coming out of South Africa were in fact imported into South Africa from the middle-East.
“Now we do not have any trade agreements with Saudi Arabia or Kuwait so all countries within the SADC region have a right to collect duty as deposit pending an investigation.
“If you have noticed we had a lot of importation of petroleum products from South Africa which according to the importers qualify under the SADC trade protocol but our information is that they do not actually qualify.
“We are going through a process of investigating, a process of establishing whether indeed they qualify and if the do we shall refund the duties that we are withholding at the moment. If they don’t qualify we will convert those duties into final tax,” Mr Chanda said.