The valuation of goods imported into Zimbabwe generally, and for the purpose of assessing ad valorem customs duties in particular, is based on the cost, insurance and freight established in accordance with the “Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (World Trade Organization (W.T.O) Valuation Agreement)” which specifies international valuation methods, and is provided by Sections 104 – 113 of the Customs and Excise Act [Chapter 23:02].
The WTO Valuation Agreement provides a “positive” system of valuation which is based on the use of six specified methods of valuation. These methods are to be applied in strict hierarchical order:
- Method 1 is the Transaction value: primary method of valuation (Section 106)
- Method 2 is the Transaction value of identical goods: first alternative method (Section 107
- Method 3 is the Transaction value of similar goods, second alternative method (Section 108)
- Method 4 is the Deductive value: third alternative method(Section 109)
- Method 5 is the Computed value: fourth alternative method (Section 110)
- Method 6 is the Fall-back method of valuation: final alternative method (Section 111) which is applied more flexible.
One exception is that the sequence of the deductive value method and the computed value method may be reversed at the request of the importer in terms of Section 109(1).
The Basic Principle: Transaction Value
The basic rule is that the value for customs purposes should be based on the price actually paid or payable for the goods when sold for export to Zimbabwe ; (for example, the invoice price), adjusted, where appropriate, to include certain payments made by buyers’.
Price actually paid or payable
- This is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods.
- Payment may be made directly or indirectly.
- an indirect payment would be the settlement by the buyer, whether in whole or in part, of a debt owed by the seller
For cases in which there is no transaction value, or where the transaction value is not acceptable as the customs value because the price has been distorted, the Agreement lays five other methods of customs valuation, to be applied in the prescribed hierarchical order:
Transaction Value of identical goods
If the customs value of the imported goods cannot be determined under the transaction value primary method, the customs value shall be the transaction value of identical goods sold for export to Zimbabwe and exported at or about the same time, same commercial level and same quantities as the goods being valued.
"Identical goods" means goods which are the same in all respects, including physical characteristics, quality and reputation.
Transaction Value – Similar Goods
If the customs value of the imported goods cannot be determined under the transaction value primary method and the identical method, the customs value shall be the transaction value of similar goods sold for export to Zimbabwe and exported at or about the same time, same commercial level and same quantities as the goods being valued.
"Similar goods" means goods which, although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable. The quality of the goods, their reputation and the existence of a trademark are among the factors to be considered in determining whether goods are similar
If the imported goods or identical or similar imported goods are sold in Zimbabwe in the condition as imported, the customs value of the imported goods shall be based on the unit price at which the imported goods or identical or similar imported goods are so sold in the greatest aggregate quantity, within 90 days to persons who are not related to the persons from whom they buy such goods
Computed Value Method
Computed value shall consist of the sum of the cost or value of materials and other processing employed in producing the imported goods, profit margin for similar goods in the export country and cost of transport , insurance and other associated costs incidental to the delivery of the imported goods to Zimbabwe.
When the customs value cannot be determined under any of the previous methods, it may be determined using reasonable means and this method should be based on previously determined values and methods applied with a reasonable degree of flexibility.
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