gtag('config', 'UA-12595121-1'); Businesses Urged to Shift Towards ZiG Payments as Tax Deadline Approaches – The Zimbabwe Mail

Businesses Urged to Shift Towards ZiG Payments as Tax Deadline Approaches

David Kudakwashe Mnangagwa
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HARARE – As Zimbabwe prepares for its upcoming quarterly tax deadline, businesses face a significant shift in payment requirements that could impact their operations.

Deputy Finance Minister David Kudakwashe Mnangagwa disclosed that companies will now be mandated to settle a portion of their taxes in the local currency, known as ZiG, sparking concerns and discussions about the country’s ongoing de-dollarization efforts.

Mnangagwa explained that due to limited availability of ZiG in circulation, businesses will need to procure the currency to fulfill their tax obligations. With taxes contributing up to $300 million, the government has stipulated that half of this amount must be paid in ZiG.

This requirement, aimed at promoting the use of the local currency, poses challenges for businesses accustomed to transacting primarily in foreign currencies, particularly the United States dollar.

Addressing concerns over the feasibility of ZiG payments for essential services such as fuel and passports, Mnangagwa acknowledged the current preference for US dollars among providers.

He noted that while fuel dealers and passport offices have the option to accept ZiG payments, many opt for US dollars due to prevailing market dynamics and historical agreements.

However, Mnangagwa emphasized the government’s commitment to facilitating a gradual transition towards increased ZiG usage. He outlined plans to incentivize businesses to accept ZiG payments by integrating them into their tax obligations. Starting from the next quarter, businesses will be required to source 50% of their taxes in ZiG, prompting a shift towards incorporating the local currency into their pricing structures.

Acknowledging the challenges posed by the ongoing de-dollarization process, Mnangagwa reassured stakeholders that measures would be implemented gradually to prevent market disruptions.

He underscored the importance of a market-driven approach to promote organic adoption of ZiG while ensuring economic stability and mitigating potential risks.

The announcement comes amidst ongoing discussions surrounding Zimbabwe’s economic policies and efforts to stabilize its currency. As businesses grapple with the implications of the new tax requirements, stakeholders are urged to engage in constructive dialogue to navigate the transition towards increased adoption of the local currency.