Zimra Loses 61 Potential Vehicles Due to Currency Fluctuations

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HARARE – The Zimbabwe Revenue Authority (Zimra) finds itself at the center of a financial fiasco, losing out on 61 vehicles that had been ordered and paid for in Zimbabwe dollars.

According to ZimLive, the debacle arose from a combination of delayed disbursement of foreign currency by the central bank and volatile currency fluctuations, resulting in a significant erosion of the payment’s value.

Officials from Toyota dealer, Mike Harris, revealed to lawmakers on Monday that out of 70 vehicles paid for by Zimra, they could only deliver 9 Corolla vehicles due to the depreciation of the Zimbabwe dollar equivalent to US$3.9 million paid by the tax collector. This erosion in value left enough funds only for 24 vehicles.

According to the Auditor General, Zimra incurred a loss of ZWL $209 million (US$1.7 million at the official rate) after paying for 35 Toyota Hilux double-cab cars and 50 Toyota Corolla vehicles that were never received. Despite payment being made in February 2022, only 15 Toyota Hilux vehicles were delivered, and none of the Toyota Corolla vehicles had been received as of December 2022.

Last year, Zimra’s attempt to cancel a tender for the supply of 85 vehicles worth over US$3.9 million was rejected by the High Court Commercial Division. The court dismissed the appeal, citing a lack of evidence to prove that Mike Harris deliberately failed to supply the remaining 70 vehicles despite full payment.

Zimra had paid for the vehicles in Zimbabwe dollars, with Mike Harris supposed to receive the necessary forex through the RBZ auction system for importation. However, the dealer cited delays in foreign currency allocations and exchange rate fluctuations as significant obstacles.

Brian Kaukonde, CEO of Mike Harris, informed the Public Accounts Committee of Parliament that the dealer could only deliver 9 Toyota Corolla vehicles out of 50 and none of the remaining 20 Toyota Hilux vehicles to Zimra despite receiving payment for 85 cars.

Kaukonde attributed the failure to deliver all 85 cars to exchange rate fluctuations and inflation, highlighting the instability in the interbank rate over the course of the contract period. He emphasized that the fluctuating economic conditions severely impacted their ability to fulfill the agreement within the stipulated timelines.