HomeBusiness DigestDuty to be paid in foreign currency

Duty to be paid in foreign currency

Ngoni Chanakira

RILED by dwindling foreign currency inflows, the Reserve Bank of Zimbabwe (RBZ) will now force importers of luxury goods to pay duty in hard currency.

dana, Arial, Helvetica, sans-serif”>RBZ officials who requested anonymity said the move was aimed at increasing foreign currency in its empty coffers as well as discouraging Zimbabweans from importing items considered “luxuries”, some of which can be sourced locally.

By yesterday the RBZ had not responded to questions sent to it two weeks ago on the issue but insiders said the move could be implemented as soon as next month.

“A meeting was held by senior RBZ officials at which this was discussed and generally agreed upon as a good and effective way of improving our foreign currency levels,” an official said. “Besides, it was generally agreed that individuals importing luxury items would not cry foul because they have access to foreign currency stashed in their offshore accounts.”

The official said luxury items to be taxed in foreign currency included motor vehicles, home appliances, spare parts and clothing.

Chairman of the parliamentary Portfolio Committee on Finance and Mutoko North MP David Chapfika has come out strongly on the foreign currency issue and its abuse, saying there are “too many Mercedes Benz vehicles” in Zimbabwe yet there is no foreign currency for essential commodities in banks.

Imported Mercedes Benz, BMW, and Lexus models including their 4X4 versions can be seen racing down Samora Machel Avenue – the street housing the RBZ headquarters. Imported wide-screen television sets have also become a must in the lounges of designer mansions.

Despite this flashy lifestyle by the well-off, Zimbabwe continues to experience difficulties with its balance of payments.

The current account deficit for this year is forecast to be US$1 billion, while a capital account deficit of about US$300 million is predicted, up from about US$200 million last year. As a result of the weak balance of payments position, gross foreign exchange reserves are expected to average about one month of imports while usable reserves are expected to cover only a few days of imports.

The country’s total external payment arrears are estimated at US$1,6 billion as at June 30 from a position of US$1,3 billion at December 31 2002.

Government arrears account for 67% (US$1,07 billion), while parastatals and private sector arrears represent 31% (US$0,5 billion) and 2% (US$0,03 billion) respectively.

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