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The returning students rebate on importation of motor vehicle has over the years enabled returning students to afford to buy and import motor vehicles into Zimbabwe at a reasonable cost. Whilst the rebate has been beneficial to returning students and residents, the rebate has been subjected to abuse by third parties importing vehicles duty-free. This abuse has resulted in the government losing out potential revenue to these 3rd parties and has now reacted by putting a cap on the value of motor vehicles which can be imported by returning students duty free. This cap is fixed at US$5000.00. If a student imports a motor vehicle exceeding this value he/she will forego the rebate and pay the full duty on the imported vehicle. This article unpacks some of the conditions that students should meet to qualify for this duty rebate.
A returning student is a person who has previously resided in Zimbabwe and returns to Zimbabwe after having completed a course of study. He or she should be above the age of 16years and should have resided outside Zimbabwe for a period of not less than 2 years. The time of arrival is critical in determining whether or not the student qualifies for the rebate and this can only be ascertained from the returning student. This is the first occasion of entering Zimbabwe by the student after successfully completing the course of study. Upon arrival at any entry point, immigration officers will ask the returning student if he or she wishes to claim the returning student status. If the students wishes to claim returning students status, the immigration officer will stamp his/her passport with RR which indicates that he or she is a returning resident. The stamp determines the student’s first occasion of entry and will determine whether or not the student can claim the motor vehicle rebate. If the student does not import the vehicle on first occasion as aforesaid he or she forgoes the duty rebate. In practice, the ZIMRA will request the returning student to produce academic transcripts, certificates or any other evidence to prove that he or she has successfully completed studies. The rebate is therefore not available to returning students who have not completed their studies for whatever reason. The vehicle must be in physical existence and fully paid for by the returning resident before the time of his arrival. Therefore if one purchases the motor vehicle after his return he or she may miss the opportunity to get the duty rebate, unless one did not declare that he has returned for good as fully stated in Goba v ZIMRA & Another (HC 4561/12) [2015]. The rebate only applies to the importation of one motor vehicle by the returning student within a period of four years. The imported vehicle may not be disposed in any manner by the returning student for a period of up to 24 months from the date of entry. In the event that the returning student wishes to dispose the imported motor vehicle within the first 24 months, he or she will be required to obtain written permission from the Commissioner. If the student disposes the vehicle within the first 24 months he or she will be exempted from paying duty from the time he used the vehicle up to the time of disposal. In this instance duty will be apportioned from the time he disposed the vehicle up to the 24th month. Where the returning student subsequently departs from Zimbabwe after getting the rebate, he or she will be required to pay duty he should have paid at the time of entry of the vehicle. The duty free facility for returning students is inclusive of VAT. Thus, in the event of disposal of the vehicle or the returning student leaving the country for a period exceeding 6 months and above from time of arrival, the retuning student will be required to pay duty and VAT which he or she had been previously exempted from the time of entry.
In a nutshell, the cap on the rebate on importation of motor vehicles by returning residents is the government’s way of saying that students are not deemed to afford expensive and luxury vehicles hence there should be a cap on the expected maximum value of motor vehicles they can import. The measure is meant to curb abuse by third parties who are not intended beneficiaries of this rebate. However, this move will result in an increase in the importation of second-hand motor vehicles which may pose environmental impacts such as emissions.