HARARE (Bloomberg) — The Zimbabwe Revenue Authority is clamping down on companies conducting business in foreign currency but paying tax in Zimbabwe dollars.
The southern African nation reintroduced the local dollar in June last year as sole legal tender and banned the widespread use of foreign currencies, mainly the the U.S dollar. While the tourism, mining and oil industries were granted exemptions to conduct trade in foreign currency, the tax body said some businesses were flouting the law.
Taxes, including pay-as-you-earn, value-added tax, income tax, capital-gains tax and mining royalties must now all be settled in foreign currency, Zimra said in a statement Monday.
“Foreign currency means the U.S. dollar, Euro, British pound, South African rand, Botswana pula and any other foreign currency denominated under the Exchange Control Order,” it said.
As of Jan. 1, for capital-gains tax purposes, all asset disposals will be assumed to have been in U.S. dollars, unless documentary proof is submitted that the transactions were conducted in the local currency, Zimra said.