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CUSTOMS ROLE IN TRADE CUSTOMS ROLE IN TRADE FACILITATIONFACILITATION

CUSTOMS SERVICES DIVISION

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OUTLINE

IntroductionIntroduction AchievementsAchievements ChallengesChallenges Remedy Proposals Remedy Proposals

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INTRODUCTION

• WTO defines WTO defines trade facilitation trade facilitation as as “the simplification and harmonization of “the simplification and harmonization of international trade procedures”international trade procedures”

wherewhere international trade procedures international trade procedures are defined as the “activities, practices, are defined as the “activities, practices, and formalities involved inand formalities involved in

collecting, presenting, communicating and collecting, presenting, communicating and processing data required for the processing data required for the movement of goods in international trade”movement of goods in international trade”

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INTRODUCTION

• Sohn (2001) defined trade facilitation as Sohn (2001) defined trade facilitation as “all activities or policies that reduce “all activities or policies that reduce transaction costs arising from transaction costs arising from eliminating or simplifying excessive and eliminating or simplifying excessive and complex procedures, practices and complex procedures, practices and processes related to trade, thus processes related to trade, thus increasing efficiency, which results in increasing efficiency, which results in

increased trade”increased trade”5

INTRODUCTION

• The most intuitive definition mayThe most intuitive definition may

be that given by Staples (2002), who be that given by Staples (2002), who stated that “trade facilitation involves stated that “trade facilitation involves reducing all the transactions cost reducing all the transactions cost associated with the enforcement, associated with the enforcement, regulation, and administration of trade regulation, and administration of trade policies.policies.

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INTRODUCTION

In the end, the objective of trade In the end, the objective of trade facilitation is to “reduce the cost of doing facilitation is to “reduce the cost of doing business for all parties by eliminating business for all parties by eliminating unnecessary administrative burdens unnecessary administrative burdens associated with bringing goods and associated with bringing goods and services across the borders” (Staples, services across the borders” (Staples, 2002).2002).

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INTRODUCTION

• These definitions make it clear that These definitions make it clear that trade facilitation refers to a wide variety trade facilitation refers to a wide variety of activities, such as import and export of activities, such as import and export procedures (e.g., customs or licensing procedures (e.g., customs or licensing procedures, customs valuation, procedures, customs valuation, technical standards, health and safety technical standards, health and safety standards etc.)standards etc.)

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ACHIEVEMENTS

1.1. Widespread Presence Widespread Presence

It is acknowledgeable that Customs has It is acknowledgeable that Customs has widespread presence throughout the widespread presence throughout the Country.Country.

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ACHIEVEMENTS

Four offices are at International AirportsFour offices are at International Airports Twenty-six are at borders and Eight are Twenty-six are at borders and Eight are

at inland portsat inland ports

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ACHIEVEMENTS

Blue points denote customs presence

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ACHIEVEMENTS

2.2. Wide spread Use of automated Wide spread Use of automated Customs System.Customs System.

Most of our Offices are automated with Most of our Offices are automated with the Asycuda System which we keep the Asycuda System which we keep improving on. improving on.

• We started with Asycuda 2.7 in 1998, We started with Asycuda 2.7 in 1998, moved to Asycuda ++ (1.18e) in 2001 moved to Asycuda ++ (1.18e) in 2001 where we still are, and we are currently where we still are, and we are currently considering moving to more advanced considering moving to more advanced versions of the System.versions of the System.

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3. 3. Reduced Number of Forms. Reduced Number of Forms.

Since implementation of Asycuda, 24 Since implementation of Asycuda, 24 processing forms that used to be used for processing forms that used to be used for different procedures have now been different procedures have now been replaced by only one form, the CE20, on replaced by only one form, the CE20, on which the various procedures are which the various procedures are differentiated by codesdifferentiated by codes..

ACHIEVEMENTS

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ACHIEVEMENTS

4. Risk Based Clearance In our efforts of improving the speed of clearance, time spent on a consignment is dependent on the level of risk attached to that particular consignment. Less risky goods are cleared faster and may not even be subjected to inspections.

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ACHIEVEMENTS

5. Authorised Economic Operators facility

Business entities with high compliance and minimum risk levels are given the facility of not clearing at the borders. Minimum intervention is made at the border and the operator is audited much later after imported goods have even

been put to use.

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ACHIEVEMENTS

6. Integrated Cashiering

As from November 2011, taxes can be at any ZRA Office. Gone are the days when clients were required to pay at the office where the transaction was started.

ACHIEVEMENTS

7. 7. Remote Declarations Remote Declarations

Businesses can connect to Asycuda Businesses can connect to Asycuda System and be making declarations System and be making declarations from their offices. They need not take from their offices. They need not take declaration documents physically to declaration documents physically to Customs as that can be done Customs as that can be done electronically. electronically.

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ACHIEVEMENTS

8. E-Payment facility

ZRA has started a facility with some Commercial banks where tax payments are done electronically. Clients do not have to walk to ZRA offices to pay their taxes but have an option of instructing

their banks to do transfers.

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TAXES, LEVIES AND FEES ADMINISTERED CONT’D

9. One-Stop Border Initiative

Zambia can boast of running the first successful One-Stop Border arrangement in Africa; and this is being done at the Chirundu border with Zimbabwe.

Under this arrangement, commercial trucks stop only once, and that is done in the

Country of importation.

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ACHIEVEMENTS

10. Availing Information to the Public

ZRA has an external website where information is availed to the Public. That information includes: legislation, applicable tax rates, sample calculations of taxes, --- and forms.

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CHALLENGES

As with any other Institution, ZRA also has its own challenges. These challenges include:

1. Insufficient funding: like any other grant funded Public institution, ZRA is short of finances to facilitate all its dreamed & desirable improvements. It cannot recruit as many technical staff as it requires, and cannot make as much capital investment as desired.

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CHALLENGES

2. Infrastructural Constraints

infrastructural constraints prevent ZRA from making certain improvements to its operations. A lot of commercial consignments cannot be cleared at Kazungula, for instance, because of inadequate parking and inspection space.

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CHALLENGES

3. Low National Tax compliance

Given the generally poor tax compliance levels in the Country, ZRA has been constrained in according facilitative treatment to everybody as it is always faced with the challenges of balancing facilitation with adequate controls.

CHALLENGES

4. 4. Smuggling Smuggling

smuggling has been a problem as it smuggling has been a problem as it robs the Government of its much needed robs the Government of its much needed revenue and it also introduces unfair revenue and it also introduces unfair competition in the business environment.competition in the business environment.

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CHALLENGES

5. 5. Corruption Corruption

Rent seeking also adds to unfair Rent seeking also adds to unfair competition in the economy when other competition in the economy when other competitors do not pay correct taxes. competitors do not pay correct taxes. Those underpaying manage to undercut Those underpaying manage to undercut legitimate prices.legitimate prices.

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CHALLENGES

5. 5. Willingness and Ability of Neighbours Willingness and Ability of Neighbours to connect to Zambia’s systemsto connect to Zambia’s systems

One of the major draw backs in some One of the major draw backs in some innovative procedures, say regarding transit, innovative procedures, say regarding transit, is the neighbours’ willingness and ability to is the neighbours’ willingness and ability to connect to ZRA systems to connect to ZRA systems to

facilitate advance knowledge of facilitate advance knowledge of

incoming cargo.incoming cargo.

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CHALLENGES

6. 6. Country’s continued Dependence Country’s continued Dependence on Import Trade Revenue. on Import Trade Revenue.

Zambia still has heavy reliance on import Zambia still has heavy reliance on import revenues and that makes ZRA to put a lot revenues and that makes ZRA to put a lot of emphasis on revenue collection. This of emphasis on revenue collection. This focus in itself pulls back on trade focus in itself pulls back on trade facilitation initiatives. facilitation initiatives.

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REMEDIES

Customs has adopted Best Practices as Customs has adopted Best Practices as stipulated in the Revised Kyoto Convention for stipulated in the Revised Kyoto Convention for purposes of modernising our core business purposes of modernising our core business areas with a view to embrace transparency, areas with a view to embrace transparency, integrity and improving service delivery. integrity and improving service delivery.

PROPOSED REMEDIES

It is hoped that improvement of It is hoped that improvement of processes by full implementation of the processes by full implementation of the Revised Kyoto Conversion will mitigate Revised Kyoto Conversion will mitigate the challenges highlighted above.the challenges highlighted above.

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REMEDIES

We have already started such implementation We have already started such implementation and what we have done so far include;and what we have done so far include;

Enforcement of the Taxpayer Enforcement of the Taxpayer Identification Number provision to Identification Number provision to enhance complianceenhance compliance

Centralisation of ASYCUDA ++ systemCentralisation of ASYCUDA ++ system

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REMEDIES

Simplification of clearance process through the Simplification of clearance process through the use of Single Administrative Document (SAD)use of Single Administrative Document (SAD)

Taxpayer Charter Taxpayer Charter Client Accreditation ProgramClient Accreditation Program Pre-Clearance Facility (five days before Pre-Clearance Facility (five days before

importation or exportation)importation or exportation)

REMEDIES

Automated Clearance for Commercial Automated Clearance for Commercial Imports through ASYCUDA ++ systemImports through ASYCUDA ++ system

Use of Non-Intrusive Inspection Use of Non-Intrusive Inspection Equipment in our enforcement processEquipment in our enforcement process

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PROPOSED REMEDIES

Provision of Remote Direct Trader Input Provision of Remote Direct Trader Input onto the ASYCUDA ++ System to onto the ASYCUDA ++ System to stakeholders ( i.e. Importers, Exporters stakeholders ( i.e. Importers, Exporters and Customs brokers)and Customs brokers)

Implementation of the E-Payment System Implementation of the E-Payment System for settlement of tax obligations on imports for settlement of tax obligations on imports and exportsand exports

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THANK YOU FOR YOUR ATTENTION