'Businesses charging in foreign currency must pay tax in forex'

HARARE - The Zimbabwe Revenue Authority (Zimra) is demanding businesses that are charging in foreign currency to pay their taxes in forex.

In a statement issued yesterday, the tax collector said there were a lot of businesses that are collecting foreign currency but in turn paying through RTGS or bond notes.

“Zimbabwe Revenue Authority (Zimra) has noticed that there are businesses that are trading, withholding and collecting VAT (Value Added Tax), PAYE (Pay As You Earn), capital gains tax and other taxes in foreign currencies.

“Following this observation, Zimra has found it necessary to clarify that these businesses should remit taxes in the specific currencies in which they collect them without any conversion to RTGS, bond notes, local point-of-sale and mobile money,” the organisation said.

The organisation’s directive comes at a time when most businesses are demanding payment in US dollars, amid a declining value of the local surrogate currency of bond notes.

The bond notes and RTGS values sharply declined after the government recently introduced Foreign Currency Accounts.

Since adopting a multi-currency regime in 2009, the US dollar has established seniority as the country’s preferred legal tender, but local banks have run out of hard currency as the government attempts to accrue forex in exchange for second-rate IOUs.

In 2016, Zimbabwe introduced bond notes which were meant to be on par with the US dollar, but have since managed to lose comparative value.

For every $100 bill Zimbabweans pay $300 in bond notes or $340 in Zimbabwe’s electronic currency known as “Zollars”, an arrangement which has come to be known as the three-tier pricing system.

The impact of the currency shortage has not been limited to everyday consumers and has seeped into other sectors of the economy, with local manufactures unable to fulfil the most basic of functions, including restocking.

Comments (9)

The Immigration department at Head Office in Harare and at all the border posts is insisting that permits and visas must be made in United States Dollars cash. I wonder what they do with that cash - there inputs are all available locally in Bond Notes, so why the forex? For shopping trips maybe or changing on the black market, giving their accounts dept $100 Bond and pocketing the other $200 bond.

Is that so? - 19 November 2018

Is there a law that requires this, or it it just the wish of ZIMRA?

fred - 19 November 2018

THE RATE IS 1:1. NO SANE PERSON WILL REMIT USD TO ZIMRA. SHAME THERE IS NO WAY YOU CAN ENFORCE WHAT YOU ARE SAYING. POOR ZIMRA.

Camilla Kasinayo - 19 November 2018

The govt is insisting that Z$1 = USD1 so what's the fuss? Zimra should be satisfied with RTGS, Bond money and stop whining. Now is the moment of truth....why should Zimra get money they haven't sweated for? What are they exporting?

Sagitarr - 20 November 2018

But that is inconsistent! Government policy is that USD$1=1 bond note. So does it matter whether they pay tax in US$ or bond?

Godfrey - 20 November 2018

RBZ says rate is 1:1, Government says rate is 1:1, Minister of Finance also puports the rate is 1:1, ZIMRA is an arm of the government, they should just STFU and first accept that the two things are just different, and for now accept the RTGS and pretend they are USD as they are telling us to.

zvorwadza - 20 November 2018

The stupidity of lying to people in broad daylight. If it was really 1:1 we wouldn't be having this discussion would we?

The Beautiful ones are not yet born - 20 November 2018

And there is no law prohibiting one from paying the VAT portion in zollars and the actual cost of goods in US$. After all the seller requires the US$ to replenish stock. If ZIMRA wants US$ they should approach Finance ministry or their bankers. It is 1:1 after all!

Joe Mamutseni - 20 November 2018

Zimra are being unpatriotic. Why do they want foreign, imperialist and capitalist lucre? They must ululate for bond & RTGS - proudly Zanu PF and Zimbabwean!!

Sharia - 20 November 2018

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