PRESIDENT Emmerson Mnangagwa’s administration has moved to scrap foreign currency duty payment on vehicle imports alongside other measures it claimed was aimed at enhancing the wider use of the much-maligned Zimbabwean Dollar.
In a statement Friday, Finance Minister Mthuli Ncube said the measures were being introduced following a stop gap measure to arrest inflation and promote the local currency.
He said to date, there has been consistency on the monetary front through due diligence exercised by the Reserve Bank of Zimbabwe which has seen a coordination between fiscal and monetary authorities.
“All duties and taxes on the importation of designated motor vehicles are now payable in Zimbabwe dollars again up to a limit of 50% of duties and taxes payable and all domestic taxes due from exporters on their export receipts are now payable in both foreign and local currency in direct proportion to the approved export retention,” Ncube said.
The treasury boss said under the new measures, if an exporter receives foreign currency of say US$1 000 at a 40% surrender ratio (60% retention), he or she will be obliged 40% of the tax in Zimbabwean and 60% in foreign currency.
“All mining royalties are now payable in Zimbabwe Dollars up to a limit of 50% of royalties due,” Ncube said.
He said part of the economic achievements prompting the latest developments are the rapid growth of privately held foreign currency reserves from levels of around US$300 million in 2018, to over US$2 billion currently in Zimbabwean banks.
He added that official reserves have also increased from less than US$100 million to over US$1,2 billion currently, which includes the US$960 million equivalent in SDRs recently availed by the IMF to Zimbabwe.
He also said in the intervening period, the government has also improved access to foreign currency by all bona fide businesses and individuals through the auction system.