THE Finance Minister recently announced that all currencies are now legal tender and yet the Reserve Bank is still insisting that traders pay for licences to trade in foreign currency.
What is foreign currency if the currencies mentioned are all legal tender?
Â If the government can collect taxes in US dollars and if the different statutory bodies providing services and local government can all charge for their services in US dollars then US dollars become legal tender.
We have a situation where on the one hand there is a desire to expand the economy to earn foreign currency and on the other there are huge licensing fees in order to trade which is making no sense whatsoever.
Add to this the 5% of gross income that is also demanded by the Reserve Bank for having an FCA account and depositing money into it. Who wants to do business in these conditions?
It is a case of the Reserve Bank continuing to act in a capacity other than a central bank. It should not be a licensing authority; it should not consider earning income by such methods. That is not its function.
Here we have the Reserve Bank collecting a separate lot of taxes in addition to the taxes that are to be paid to Zimra.Â
One has to ask, where is this income accounted for? Is it going into government coffers as income or is it being lost in the Reserve Bank and going towards the Zanu PF slush fund that the Governor seems to operate?
If one wants taxes to be paid in foreign currency then business must be able to operate in foreign currency without let or hindrance.
The Stock Exchange may reopen in foreign currency and we find that again there are levies to be made to the Reserve Bank. Exporters and the mining sector are also expected to contribute to the Reserve Bank one way or another.
The Reserve Bank is being set up to be a secondary tax department with little or no oversight over what happens to all this income. It is set to earn a very substantial amount of foreign currency out of the economy with the approval of government but without any control over how it is to be spent.
It should be recognised as another form of tax (the country is already overtaxed) and accounted for in the Budget.Â Â
It is time that the government realised that all these rules and regulations mean that there will be less legitimate business and more informal cash business going on in the economy and if they freed the people to operate properly and just pay taxes in the normal way they would be a lot better off.
The idea that the Reserve Bank should be a secondary tax department makes no sense whatsoever and the Reserve Bank has already proven that it is not an honest broker and has been involved in many nefarious activities that it should never have been involved in. Why are we continuing with this fiasco?
W Peters, Â