The Zimbabwe Revenue Authority says it will continue charging duty in foreign currency on goods designated to pay in forex despite the liberalisation of trading of the United States dollar exchange rate against Real Time Gross Settlement (RTGS) Dollars and all other currencies in the multi-currency basket.
Last week, the Reserve Bank of Zimbabwe floated the exchange rate as it seeks to bring sanity in the foreign currency market, promote exports, boost Diaspora remittances and investments, eliminate multi-tier pricing and preserve the value of local forms of money.
The central bank had pegged RTGS balances at one-to-one with the US dollar, but shortages resulted in high premiums for US dollars in the unofficial market that is outside RBZ control.
Banks started trading the RTGS dollar on the interbank market platform on Friday at 2,5 RTGS dollars and indications are the figure might stay there for some time.
Following the floating of the exchange rate, many people had thought the prevailing rate would apply when paying duty of goods designated to pay in forex including motor vehicles.
Last year, the Government promulgated Statutory Instrument 252A of 2018, which provides for the payment of duty for selected goods, including luxury motor vehicles in forex to discourage usage of hard currency on luxury commodities.
Zimra commissioner general manager Ms Faith Mazani told The Herald Business yesterday that until the SI 252A was repealed, Zimra will continue collecting duty in forex on behalf of its principal.
“The Statutory Instrument is the law that has to be repealed first. Until it is repealed, Zimra will continue collecting duty on selected goods in foreign currency,” she said.
Charging duty in foreign currency is aimed at limiting spending of foreign currency on luxury goods at a time the country is facing crippling shortages of hard currency.
Under the new exchange regime, the central bank established an interbank foreign exchange market to formalise trade in foreign and local currencies through banks and bureaux de change on a willing-buyer, willing-seller basis.
This entails denominating the existing RTGS balances, bond notes and coins in circulation as RTGS dollars to establish an exchange between current monetary balances and foreign currency.
The RTGS dollars will become part of the multi-currency system and a legal instrument, which amends the Finance Act of 2009 that pegged the US dollar at par with bond notes and RTGS balances, has already been prepared and will be gazetted soon.