Customs and Excise (General) (Amendment) Regulations, 2024 (No.119)

The Minister of Finance has inserted a new section 144Z into the Customs and Excise (General) Regulations, 2001, creating a rebate of duty on capital equipment imported by medicinal cannabis producers. The regulations are expressed to be effective from 1 January 2023 to 31 December 2024, so they are backdated by roughly eighteen months against the 12 July 2024 gazette date and expire at the end of 2024.

Only a narrow group qualifies. A "cannabis producer" is a person who has signed a Fiscal Stabilisation Agreement with the Zimbabwe Investment and Development Agency and has been certified by the Secretary for the responsible Ministry. The equipment must be plant, machinery or equipment used exclusively for medicinal cannabis production in or in connection with a factory, approved by the Commissioner on the recommendation of the Minister responsible for industry.

The claiming conditions are strict. The importer must apply in writing to the proper officer, produce the Secretary's certificate, declare that the equipment is solely for medicinal cannabis production, and undertake to pay the duty at once if the equipment is sold or diverted. The applicant must also be registered with ZIMRA and hold a valid Tax Clearance Certificate.

Two clawbacks matter most. First, if the equipment is not commissioned within six months of the rebate being granted, the rebate lapses and the duty becomes due and payable from the date the rebate was granted. Second, the equipment cannot be sold or disposed of within five years of entry under rebate without the Commissioner's prior written permission and payment of the duty that would have been due; the Commissioner may accept a lesser amount calculated on monthly pro-rata depreciation, and may remit the duty entirely where the equipment is proved to have been damaged beyond economic repair in an accident.

The instrument does not state the rate or amount of duty rebated — the rebate is of the duty otherwise payable on the tariff classification of the equipment concerned.