HARARE: Failure by Zimbabwe United Passenger Company to pay a $2,5 million import duty to Zimbabwe Revenue Authority for its recently imported 50 buses, has resulted in the fleet gathering dust for four months in a bonded warehouse in Harare.
Zimra allowed the bus company to keep the 64-seater FAW buses in its Belvedere yard until duty was cleared.
The development comes at a time when most of Zupco’s old coaches were parked for various faults with only a few on the road. Duty for each bus imported at a cost $75 000, is $50 000 and Zupco, since March this year has been paying a monthly instalment of $50 000.
At that rate, the brand new buses will be registered and start operating after four years. Zupco chief executive Mr Clifford Muwoni, yesterday said the company was struggling to raise import duty charged on each of the 50 buses.
Mr Muwoni said the duty was too much and the company was only paying $50 000 per month to clear the debt. Mr Muwoni said; “It is true we imported 50 buses in March and we failed to pay the duty at once.
“The buses are parked in the bonded warehouse. We applied to Zimra for a bonded warehouse that allows us to keep the buses without using them until duty has been fully paid,” he said.
Mr Muwoni said when the buses were purchased last year, the company was only compelled to pay Value Added Tax for them, but the policy changed and full duty was demanded. When the ship docked, Zimra demanded full import duty from the parastatal, which caught them by surprise.
“All along we used to pay VAT only for the bus imports, but when the buses arrived, we were asked to pay full duty of $50 000 per bus when the cost of a single bus in China was around $75 000. “We were not expecting such a duty hike,” he said.
Mr Muwoni said the duty was too heavy for the struggling parastatal and that had Zimra allowed the buses to operate, the debt would have since been cleared. He told The Herald that he would meet Zimra officials today (Friday) for talks considering the company was losing business because of the grounded fleet.
“Zimra has agreed to meet with us tomorrow (Friday) when we will put our challenges before them. Paying for the buses is too heavy for us and we will try to come up with a position that allows us to quickly clear the debt and to ensure the company keeps on going,” Mr Muwoni said.
The Herald understands Zupco has been setting targets for the few running buses and in the event that the buses miss the cash targets, they would be parked.
Sources said the targets policy was negatively affecting Zupco’s cash flow as only a few buses would be allowed to operate. However, Mr Muwoni said the issue of targets was an administrative measure to motivate the bus crews.
“It is correct we do set targets for our crews, about $20 000 monthly per bus but that is just a motivational strategy to improve cash flow. “We do not really park the buses when the crews miss their targets,” he said.
Zimra spokesperson Mr Taungana Ndoro, said he required more time to get clearance before commenting. “I cannot comment on the case right now because I need to be cleared first. I also need to get the details of the Zupco case before I give Zimra’s position,” said Mr Ndoro.
