RBZ Allows SEZ, VFEX Firms Retain 100% Foreign Currency

RESERVE Bank of Zimbabwe (RBZ) Monday allowed companies operating in Special Economic Zones (SEZ) or listed on the Victoria Falls Stock Exchange (VFEX) to retain up to 100 % of their foreign currency earnings.

In a circular to exporters, the RBZ director of exchange control, Farai Masendu said the move follows Finance Minister Mthuli Ncube’s announcement of the Incremental Export Incentive Scheme which aims at boosting export revenues.

“The scheme has been established to boost productivity by firms as well as encourage companies that are not exporting so that they may venture into the exporting business and to generate sustainable growth in exports revenue,” he said.

He added the measures are aimed at fine-tuning the policy on the export receipts retention threshold for exporters to accrue benefits directly, and to encourage listing and participation of companies on the VFEX, and the Victoria Falls Offshore Finance Centre.

Under the measures, all exporters will retain 80% of their foreign currency, while exporters licensed under SEZ and those listed on the VFEX will retain 100%.

However, the incentives are subject to the central bank stipulated calculation formula.

“Given that the majority of exporters receive their export proceeds through more than one dealer, the recommended amount of the incremental export incentive shall be realised on the export proceeds received during the month/s after assessment and verification by exchange control,” said Masendu.

Authorised dealers are expected to submit applications for the incentive on behalf of their clients, to the Exports Department, via the Exchange Control Document Management System.

Gold producers who deliver gold to Fidelity Printers and Refiners above their average monthly deliveries shall also be entitled to a retention level of up to 80%.

“Large scale producers who qualify for the 80% shall also be entitled to directly export gold equivalent to the incremental portion so as to enable them to secure funding in form of gold loans, to enhance their gold production,” added Masendu.