WHAT IS EXCISE?

  • It is duty levied on specified locally manufactured goods and on provision of specified services in Zimbabwe
  • It is also levied on the importation of the specified goods.

HISTORY OF EXCISE IN ZIMBABWE

The name excise is derived from the Dutch accijns, which is presumed to come from the Latin word accensare, meaning simply "to tax". Excise was introduced in Southern Rhodesia in 1901 on spirits. In 1925, it was introduced on beer, matches, playing cards, sugar and manufactured tobacco. It was extended to cigarettes in 1940. In 1960, it was imposed on motor spirit produced by Wankie Colliery and ZISCO. In 1964, it was introduced on still wines. 1969-1970 saw excise duty being imposed on locally assembled passenger motor vehicles. In 1980, it was imposed on opaque beer powder declared to be traditional beer in terms of the Traditional Beer Act. Excise was introduced on all wines and aerated beverages in 1981. 2006 saw excise duty being introduced on sale of used motor vehicles.  In 2009, excise was introduced on Diesel and Petrol.

 

WHY EXCISE DUTY

Excise duty is imposed for financial, public safety and health, public morals and environmental protection. In defense of excise on strong drink, Adam Smith wrote:

"It has for some time past been the policy of Great Britain to discourage the consumption of spirituous liquors, on account of their supposed tendency to ruin the health and to corrupt the morals of the common people."

 

Samuel Johnson was less flattering in his 1755 dictionary:

EXCISE. “A hateful tax levied upon commodities, and adjudged not by the common judges of property, but wretches hired by those to whom excise is paid”.

As a deterrent, excise is typically directed towards three broad categories of harm:

  • Health risks from abusing toxic substances typically, this includes tobacco and alcohol
  • Environmental damage (thus acting as a green tax) for example fossil fuels (such as petrol)

Money raised through excise may be utilised in redressing of specific social costs associated with the product or service on which it is levied. Tobacco tax revenues, for example, might be spent on government anti-smoking campaigns, or healthcare for cancer, heart disease, vascular disease, lung disease, and so on.

CONTRIBUTIONS OF EXCISE COLLECTIONS TO ZIMRA TARGETS:

Excise collections contribute 42% of all the revenues collected by the Customs and Excise Division and is the number 4 tax head after VAT, PAYE and Corporate Tax. The Commissioner Customs and Excise, the Commissioner General and ZIMRA Board recognised the importance of this Excise Revenue Head and created a specialised unit to manage the Excise issues in Zimbabwe.

OBLIGATIONS OF EXCISE MANUFACTURERS

Excise Manufacturers are required to honor a number of obligations as outlined below:

  • It is a requirement that all persons manufacturing goods appearing in the excise tariff should be licenced. A licence is also required for the manufacture of any potable liquid containing more than 1,7% Litres of Absolute Alcohol
  • Any manufacturer of goods liable to excise duty must have a valid bond with sufficient surety as security for excise duty at stake. The bond is for security of revenue and to ensure compliance with the Act
  • Every manufacturer of goods liable to excise duty must keep a record of all transactions and such records must always be up to date and be kept at the licensed premises.
  • Should submit a return, together with the payment of excise on or before the 20th day of the month following the month of removal of goods from premises (10th for airtime providers).

 

CIRCUMSTANCES THAT CREATE EXCISE DUTY LIABILITY

  • Removal of goods from licensed premises.
  • Consumption of excisable goods within licensed premises.
  • Manufacture of an excisable commodity outside licensed premises.
  • Re-importation of excisable goods into Zimbabwe after having been exported in bond.
  • Gratuitous issues to staff or other organizations.
  • Consumption of any form.
  • Pilferages
  • Losses or deficiencies in stock, which cannot be explained to the satisfaction of the commissioner.
  • Surplus stock found on licensed premises.

 

CIRCUMSTANCES UNDER WHICH EXCISE DUTY MAY BE WAIVED

  • Where goods in question were destroyed accidentally while in a licensed premise
  • Goods which have been destroyed with the permission of the Commissioner
  • Where goods have been properly exported from Zimbabwe

 

LIST OF EXCISABLE GOODS

  • Wine made from Grapes
  • Beer and spirits
  • Opaque beer powder
  • Tobacco products
  • Airtime
  • Change of ownership on sale of used motor vehicles

 

 

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My Taxes, My Duties: Building my Zimbabwe!!

 

Disclaimer

This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.