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Govt removes customs duty from petroleum products 


OIL marketing companies will no longer pay customs duty on petroleum products brought into the country.

Government has removed customs and import duty from petroleum products supplied in the country.

According to a letter by Ministry of Energy Permanent Secretary Himba Cheelo to heads of Oil Marketing Companies (OMCs) Government has amended the customs duty rate in Chapter 27 of the Customs and Excise Act Cap 322 from 25 percent to free rate.

Ms Cheelo said this applied to importation of petrol and low Sulphur Gas Oil and shall come into effect on 1st January 2023.

“In view of the above, please be further advised that there shall be no further requirement for import permits from the ministry of Energy,” he said.

She said the OMCs were required to submit their projected importation quantities for the first quarter of 2023, to the Ministry of Energy by end of business on December 30, 2022.

Ms Cheelo reminded OMCs of the provisions of Statutory Instrument No35 of 2021 which states that 50 percent of the tankers used for importation shall be from local transporters and failure to adhere to the directive shall attract appropriate action.

Meanwhile Economist Kelvin Chisanga said the scrapping off 25% on excise duty may foster stability in fuel supplies and that zero-rating on fuel was a necessary measure.

Mr Chisanga explained that government’s suspension of excise duty on key commodities such as petroleum was a good strategic move to moderate security of supply of the commodity and make a long-lasting solution on the energy subsector in the local economy.

He said the zero-rating of excise duty on fuel had been subjected to some temporal policy changes throughout the fiscal year of 2022, as this had been the only policy instrument that enjoyed three month extensions in the current running year.

“The zero-rating has been suspended many times in the current budget of 2022 and was then lastly reinstated temporarily in September 2022 for the period up to end of December 2022 to help buffer economic challenges that could have come through with this particular last quarter which is usually considered as a dry-spell period due to less productive activities,” he said.


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