How does ZIMRA determine the value of your goods to calculate duty?

To promote fairness, transparency, and objectivity, ZIMRA utilizes an international framework of regulations to determine your Value for Duty Purposes (VDP). The primary and most frequently employed valuation method by ZIMRA is the Transaction Value as outlined in Section 106 of the Customs and Excise Act [Chapter 23:02]. The Transaction Value refers to the actual price paid or payable for the goods when sold for export to Zimbabwe, inclusive of mandatory statutory adjustments such as international freight and insurance.

However, for this primary method to be accepted, the law specifies four conditions:

• There must be no limitations on how you use, sell, or dispose of the goods
• The sale price cannot be subject to conditions for which a value cannot be determined.
• No part of the proceeds from your later resale or use of the goods can flow back directly or indirectly to the foreign seller, unless a clear adjustment can be calculated.
• The buyer and the seller must not be related. If they are, the importer must prove that the relationship did not influence the price.

Who is Deemed "Related"?

According to Section 104(3) of the Act, two parties are deemed related if they are business partners, employer-employee, members of the same family, or if one party owns or controls 5% or more of the voting stock or shares of both entities.

What happens if ZIMRA doubts your invoice?

As per Section 111A of the Act, if a customs officer has reason to doubt the truth or accuracy of your declared price, they will ask you for further proof. Should that proof be inadequate or absent, ZIMRA is legally obligated to reject your transaction value and must systematically explore five alternative valuation methods in a defined hierarchy:

1. Transaction Value of Identical Goods Method (Section 107 of the Act)

ZIMRA looks for the accepted value of identical goods exported to Zimbabwe at or about the same time, sold at the same commercial level and quantity. The goods must be made in the same country, share the same physical characteristics, quality, and reputation, and be sold under similar conditions.

2. Transaction Value of Similar Goods Method (Section 108 of the Act)

If identical goods cannot be found, ZIMRA looks for similar goods. These are products manufactured in the same country that, although not identical in every aspect, possess comparable component materials and characteristics that enable them to perform the same functions and be commercially interchangeable.

3. Deductive Value Method (Section 109 of the Act)

If the goods cannot be valued by what they cost abroad, ZIMRA examines their selling price within Zimbabwe. The value is based on the unit price at which the imported goods (or identical/similar ones) are sold in their greatest aggregate quantity to unrelated local buyers within 90 days of import. From this local price, ZIMRA deducts local profits, domestic transport, and customs duties to arrive at an import value.

4. Computed Value Method (Section 110 of the Act)

This method focuses on the actual production costs. It is calculated using data provided by the foreign manufacturer, which includes: the costs of raw materials and manufacturing, packing expenses, general export costs, the typical profit margin for goods of that category, and transportation and insurance to the foreign port of export.

5. The Fall-Back Method (Section 111 of the Act)

If all other methods fail, the Commissioner applies the Fall-Back method. This involves flexibly adapting the previous four methods using reasonable, real-world data available in Zimbabwe that aligns with international GATT principles.

Even under the Fall-Back method, ZIMRA is legally forbidden from basing value on arbitrary or fictitious values, the selling price of goods manufactured inside Zimbabwe, minimum customs value systems, or the domestic market price in the exporting country

Statutory Adjustments (Section 113 of the Act)

To ascertain your final Value for Duty Purposes (VDP), adjustments must be made to the price indicated on your invoice. Certain costs need to be added, while others may be subtracted.

Key additions to include in your declared value, if they are not already reflected in your invoice price, are as follows:

• Commission and brokerage (excluding buying commissions paid to your own sourcing agent).

• Packing and container costs.
• Assists: The value of tools, moulds, materials, or foreign design work supplied by you free of charge or at a reduced cost to help the manufacturer make the goods.
• Royalties and license fees that you are required to pay for patents, trademarks, or copyrights as a condition of the sale.

Private Imports: Non-merchandise goods (Section 112 of the Act)

When importing items solely for personal use (not intended for trade or resale), the law classifies these as non-merchandise goods.

If a customs officer finds that your declared value does not reflect a genuine open-market price or was incorrectly declared, the Commissioner has the power to immediately determine the value based on historical records of identical private imports or by flexibly adapting the primary valuation methods.

**NB: Declaring an undervalued amount, altering documentation, or presenting a forged invoice is a serious offense. This immediately triggers Section 111A, resulting in the total rejection of your declaration, a transition to harsher valuation methods, long border delays, heavy financial penalties, and potential seizure of your cargo.

Always maintain a clean, traceable financial footprints. Keep original supplier contracts/agreements, detailed freight statements, and bank telegraphic transfers readily available to substantiate the declared values to ensure your valuation process is smooth and compliant.