Take advantage of trade deals, companies urge -Newsday Zimbabwe

ZIMRA

The Zimbabwe Revenue Authority (Zimra) has advised companies to take advantage of commodity sources and trade agreements to gain tax benefits and promote industrial growth.

Zimra’s representative, Makhosazana Kuture, made the remarks at the National Trade Traffic Conference at the grounds of the Zimbabwe International Trade Fair in Bulawayo on Tuesday.

The conference was held under the theme Unpacking Zimbabwe’s trade deals and the benefits that can accrue to local industry.

Kuture said product rules of origin are legal provisions used to determine the nationality of a product in the context of international trade and in a preferential trading area such as the Southern African Development Community, the of Eastern and Southern Africa and the African Continental Free Trade Area. .

The rules of origin specify the conditions under which a product exchanged between the parties to an agreement can claim the status of local “economic” origin and benefit from the preferences offered by the trade agreement.

Products that do not conform to the rules of origin must be traded on most-favoured-nation terms, which in most cases means much higher tariffs.

“The benefits of rules of origin are that they help in developing marketing strategies exploring new markets, new products, product cost, tariffs, industry growth, market creation, the fight against foreign competition, the creation of jobs at the national level, economic growth, foreign policy, the improvement of social amenities,” Kuture said.

The application of rules of origin is done by dictating a sufficient level of processing that must take place in a given country for the product to be considered to have originated in that country.

“The rules of origin of free trade agreements (FTAs) define the conditions under which a product is considered originating and, therefore, eligible for preferential treatment. Prevent trade diversion and transhipment with the aim of (falsely) obtaining origin and preferential treatment. The reasons for determining the origin of goods are that duty rates can be affected, for statistical purposes, sourcing decisions, marketing decisions,’ Kuture said.

Rules of origin are divided into two categories, namely non-preferential and preferential. Non-preferential rules of origin are used to determine the economic nationality of products subject to trade policy measures, anti-dumping rulings and tariff rate quotas.

Non-preferential rules of origin are used for statistical purposes, government procurement, origin markings and “Made in” labeling. Preferential rules of origin determine the nationality of a product subject to preferential tariff rates under an FTA/PTA.

“Except as otherwise provided in this Agreement, each Party shall eliminate customs duties on goods originating in the other Party” Each FTA/PTA has its own set of rules of origin. The criteria for determining the origin are wholly obtained goods, live animals born and bred in the breeding party, animals obtained by hunting, trapping, fishing, gathering or capturing in the party. Goods obtained from live animals in the party (milk, egg, etc.), plants and plant products harvested, picked or gathered in the party (cut flowers), minerals and other natural substances”, a- she declared.

Substantial transformation rules apply to goods produced from non-originating materials that must undergo substantial transformation in a state party for the goods to be considered originating.

Kuture said goods are considered originating when they meet the requirements set out in the product-specific rules.

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