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Sunny Yi Feng Tiles Zimbabwe, a prominent Chinese tile manufacturer, is urging Zimbabwean authorities to tackle the high import duties on raw materials and is asking Zambia to reassess a 5% surtax on exports. The company contends that these issues undermine its competitiveness in the regional market and place a burden on its operations in Southern Africa.
One of Sunny Yi Feng’s key concerns centres on Zambia’s 5% surtax imposed on imports, including raw materials used in tile production. This tax, introduced under Zambia’s domestic revenue collection framework, has become a significant obstacle for businesses like Sunny Yi Feng, which rely on regional trade.
In its petition to Zimbabwe’s Competition and Tariff Commission (CTC), the company noted that Zambia’s surtax has increased the cost of doing business, particularly for materials imported into Zimbabwe or exported between the two countries. The CTC, in its quarterly newsletter, acknowledged this issue but highlighted that the surtax aligns with policies endorsed by SADC and the Common Market for Eastern and Southern Africa (COMESA). Both regional organisations permit member states to impose certain domestic taxes to protect local industries, provided they comply with trade agreements.
The CTC has advised against raising duties on imported tiles, citing the potential disruption to the balance between local and foreign producers. It stated that maintaining the current tariff structure would ensure that Zimbabwean producers remain competitive while reducing reliance on imports. Furthermore, the CTC has called for greater emphasis on local sourcing of raw materials, a move that could strengthen Zimbabwe’s domestic value chains. By encouraging local production of raw materials, the commission believes the country can reduce its dependence on imports and mitigate external price fluctuations.
In its review, the CTC observed minimal price differences between locally produced and imported tiles in Zimbabwe. However, it noted that Zimbabwe remains a significant export market for tiles manufactured in Zambia, while Zimbabwean exports to Zambia are comparatively limited. The asymmetry, it argued, further highlights the need for balanced trade policies that foster regional collaboration rather than competition.
To support the domestic industry, the CTC has recommended reducing duties on raw materials not produced locally, which would lower production costs for manufacturers like Sunny Yi Feng. These recommendations have been submitted to the Ministry of Industry and Commerce for consideration. In addition, the CTC has initiated a review of trade remedy regulations to better address unfair trade practices and protect domestic industries. It has also prioritised training government officials and local manufacturers to navigate complex trade frameworks and negotiate favourable agreements.
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Sunny Yi Feng, while facing challenges, remains a significant player in Zimbabwe’s tile manufacturing sector. The company’s output has played a pivotal role in reducing Zimbabwe’s reliance on imported tiles, which often come at a higher cost. However, its ability to expand and sustain operations is increasingly tied to the resolution of the tax issues affecting its operations across Zimbabwe and Zambia.
