HARARE – The Treasury in Zimbabwe has announced that it will not accept foreign currency payments for the 50 percent local currency tax component in order to prevent tax arbitrage.
The Finance and Economic Development Minister, Prof Mthuli Ncube, directed taxpayers to settle 50 percent of the foreign currency portion of their corporate tax obligations in local currency for the June 2023 Quarterly Payment Date (QPD) to promote the use of the Zimbabwe dollar.
According to the Treasury, the 50 percent tax obligation payable in local currency will be converted at the Wholesale Auction Exchange Rate prevailing on the date when the tax is due. The government emphasized that it will not accept payments in USD or any other foreign currency for the local currency portion of corporate income tax.
Taxpayers who do not have sufficient Zimbabwe dollars to meet their local currency tax obligations are urged to approach the Reserve Bank of Zimbabwe through their banks to facilitate the conversion of their USD holdings into the required Zimbabwe dollars.
The Treasury also warned corporations against engaging in illegal parallel markets, stating that they would face sanctions from the Financial Intelligence Unit. The government is committed to implementing currency reforms to stabilize the economy and achieve lasting price stability. The central bank will maintain a tight monetary policy stance to restore and maintain macroeconomic stability.
It’s important to note that this information is based on the provided news excerpt and represents the situation as of the announcement. It’s advisable to refer to official sources and updates from relevant authorities for the most accurate and up-to-date information regarding taxation and currency regulations in Zimbabwe.