Change the world

Journal for Development and Leadership

Volume 3, Number 1


 

The implications for Zimbabwe of a harmonised COMESA and SADC customs union
Mugano, G., Brookes, M. and le Roux, P.

The implications of the formation of a customs union on revenue and imports are ambiguous and depend on a number of factors. The theoretical ambiguities give rise to the need for empirical studies that generate information for the particular customs union that is under consideration. This study uses the Tariff Reform Impact Simulation Tool to evaluate the impact of COMESA/ SADC customs union on Zimbabwe. The findings of the study reveal that the customs union im- ports increase by 0.2%. The country will witness a decrease of tariff and total revenue by 8.6% and 3.3%, respectively. VAT and excise duties emerged as significant contributors to Zimbabwe’s revenue. The study also revealed that Zimbabwe is losing 51.8% of expected revenue through excessive exemptions. It is therefore important for Zimbabwe to put in place austerity measures meant to improve revenue collection from other sources such as value added tax and income tax and cut unnecessary tax exemptions if the import tariff revenue loss is to be curtailed.

Keywords: Customs Union; Revenue Implications; Imports; Zimbabwe