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Introduction
The government has finally gazetted the law in form of Statutory Instrument 72 of 2019 on 22 March 2019 providing for a refund of excise duty on fuel to specified beneficiaries. This move gives impetus to the Zimbabwe Revenue Authority (ZIMRA) to process the fuel duty refunds as initially announced on 20 January 2019. The government had on the 20th of January 2019 issued a statement providing for relief through refund of excise duty on fuel consumed by registered businesses in the manufacturing, mining, agriculture and transport industries. This rebate was specifically available on the basis that, it shall only be applicable to those traders who met the requirements. The major thrust of the refund facility was to ensure that there will be no price increases of goods and services by beneficiaries relative to the change in the price of fuel that had been brought about through statutory instrument 9 of 2019.
Which period is covered by the refund facility?
In terms of the instrument, the regulations shall be deemed to come into operation on 13th January, 2019, up to 22nd February, 2019. This therefore suggests that the beneficiaries will only be allowed to claim the refund in respect of fuel payments that they made from the 13th of January 2019 up until the 22nd of February 2019, when the interbank foreign exchange system was introduced. It therefore means that any claims in respect of fuel payments falling outside the stipulated period will not be refunded. It is worth noting that the period covered by the refund facility is the period when the rate of the RTGS and the US dollar were still at par. Due to the adoption of the interbank foreign exchange rate system, where the exchange rate between the RTGS and the US dollar is now determined on a willing buyer willing seller the refund facility might have been overtaken by events due to the evening out of the purchasing power parity.
Who qualifies for the refund?
An approved fuel duty refund beneficiary is one who is eligible for the duty refund. The statutory instrument defines an approved fuel duty refund beneficiary as any person or body of persons, carrying on a trade in the agricultural, mining, manufacturing and transport sectors and has made an application on Form No. Ex FRF 2 to the Commissioner to claim refund of duty in terms of section 125 of the Customs and Excise Act. This essentially excludes all other traders in other sectors.
Changes in the registration application process
Whilst the previous announcements required an applicant to submit their application through their business association, the statutory instrument requires an applicant to submit their application to be registered as a beneficiary direct to any ZIMRA customs office and furnish the required documentation. The documentation and details required for registration remained the same as previously announced, that is, the name under which the approved fuel duty refund beneficiary will operate and the address of its principal office in Zimbabwe; the applicant’s company registration/incorporation documents; proof of membership of a business association; and current and valid Tax Clearance Certificate issued by ZIMRA. Submission to ZIMRA of all the required information and documentation would enable them to be registered as an approved fuel duty refund beneficiary, eligible to claim excise duty refunds.
Conditions for granting of the refund
For a beneficiary to be able to get the refund, they should submit an invoice or receipt issued by the supplier of the fuel from which duty paid shall be refunded, which contains the following particulars;-
- an individual serialised number and the date on which the invoice or receipt is issued; and
- the name, address and Zimbabwe Energy Regulatory Authority licence number of the supplier; and
- the name and address of the recipient of the fuel; and
- a description of the goods supplied; and
- the quantity or volume of the fuel supplied; and
- registration number of the vehicle supplied with fuel or description of the container in which the fuel has been loaded; and
- the value of the fuel supplied; and
- any other additional particulars as may be required by the Commissioner.
Documented proof of productive use of the fuel for the period the claim is another key requirement to be submitted to ZIMRA in claiming the refund. If any of the above requirements is not available, the refund will not be processed. The refund claim must be submitted by the 10th day in the month following that of purchase of the fuel. The validity of the invoice shall fall within the period of claim.
Refund set off against outstanding tax obligations
If the Commissioner is satisfied that the application for refund made by a person meets all the relevant requirements; s/he will refund the total amount claimed if the approved fuel duty refund beneficiary has no outstanding tax liability. However, if an applicant has got some outstanding tax liabilities, then ZIMRA will refund the balance, after deducting such outstanding tax liability to the approved fuel duty refund beneficiary. The beneficiaries should also provide truthful information as any false information supplied in connection with the refund claim will render the claimant liable to hefty fines or imprisonment.
Conclusion
The excise duty refund facility covers a fixed period that is 13 January to 22 February 2019. Businesses can therefore not be expected to bank on the facility any more as it has since expired. Going forward, businesses should therefore make their business decisions bearing in mind that the facility no longer subsists.