Government calls local authorities, agencies to order over forex transactions

GOVERNMENT has once again directed defiant local authorities and state agencies to charge fees and levies in local currency saying demanding foreign currency is in violation of the country’s laws.

It said demanding forex does not only militate against Government policy to stabilise the economy but piles a burden on ordinary people who do not have access to forex.

In a statement yesterday, the Ministry of Finance and Economic Development said under the National Development Strategy 1, the Second Republic has made considerable progress in fostering macro-economic stability by implementing a broad range of fiscal and monetary stabilisation measures.

Resultantly, there has been notable stability in the economy, the exchange rate and general prices of goods and services.

Recently, the Government introduced additional measures to promote the use of local currency and these include the 50 percent settlement of tax obligations of the foreign currency portion of corporate tax in local currency.

Further to that, in May, the Government directed that all Government agencies including local authorities should collect fees and levies in local currency in order to promote the wider use of domestic currency. However, there have been pockets of resistance to the directive, the ministry noted.

“However, Government notes with concern the outright disregard of this directive by certain local authorities and Government agencies who either have gone ahead to issue notices to the contrary or continue charging services exclusively in United States dollars,” reads the statement.

“The City of Harare is one such case in point. The behaviour is not only in contravention of the law but also militates against Government policy. Therefore, all Government agencies and local authorities are reminded to comply with the Government directive with immediate effect.”

Last week, the opposition CCC led Harare City Council tried to switch to US dollar rates collection from Saturday on two-days’ notice but had this illegal attempt shot down by the Government a day later.

Authorities have made it clear that the Zimbabwe dollar is the sole legal currency and that nothing can be billed in other currencies without special permission, which councils do not have.

Subsequently, the Government has directed entities to stop charging rates in United States dollars only after the council had issued a notice to the residents seeking to index bills in forex only.

Analysts suggested that the council made the announcement so as to raise money to fund the cash strapped CCC in the upcoming general elections slated for August 23 this year.

The Treasury has said that the Government remains committed to the broad use of local currency for domestic transactions, which started in 2019 when the country adopted the use of the Zimbabwe dollar.

It said several legal instruments have also been promulgated by the Government to facilitate the re-introduction of the Zimbabwe dollar.